A lot of crypto traders focus their attention only on the top trending cryptocurrencies such as Bitcoin (BTC), Ethereum (ETH), Tether (USDT), and eventually a few other cryptos from the top 100 rank list on Coinmarketcap. However, there are many high-quality altcoin projects that have lower market caps and trading volumes than most popular cryptos but still bring meaningful technological innovations to the table.
One such cryptocurrency is Siacoin (SC), a crypto project that aims to provide users worldwide with an affordable, secure, and reliable decentralized cloud storage platform as an alternative to centralized services such as Google Cloud, Dropbox, and iCloud.
Let’s take a detailed look at Siacoin, how it works, its key features, and learn where you can store these coins in case you decide to invest in the project.
Siacoin is a cryptocurrency ecosystem that enables users to store all kinds of personal data and information on a decentralized cloud platform that isn’t dependent on any central authority or server. The project was first launched in 2015 as a beta version, but it wasn’t fully operational until 2016 when the Siacoin 1.00 version was launched by the developer team.
The SC network has its own custom blockchain and it’s powered by a proof-of-work mechanism, which means it can be mined just like BTC, ETH, or Litecoin (LTC). The team behind the project is led by crypto enthusiasts David Vorick and Luke Champine from Nebulous, a crypto company from Boston which is now known as Skynet. What motivated the developers to create Siacoin was a vision of a secure and reliable p2p (peer-to-peer) cloud storage network, where users don’t have to pay high amounts of money to store their files.
Cloud storage solutions have become immensely popular and users have grown accustomed to storing their files online in order to save storage space on their PCs and laptop computers and to be able to access their files online from their mobile devices.
However, the most popular cloud service providers are rather pricey and require monthly subscriptions that cost from 10 to 20 USD per month on Dropbox, one of the most popular storage platforms. Compared to this, the Sia storage platform is much cheaper, costing between 1 and 2 USD per month for 1TB of storage space.
SC is still far behind in popularity and adoption rate compared to mainstream cloud storage platforms, but it has a lot of potential because of its low price, reliable services, and great security.
Compared to robust, centralized storage platforms, Siacoin offers features that really focus on user experience as a top priority, enabling SC to potentially surpass the adoption rate of many popular cloud services.
Affordable and Reliable Storage
As mentioned, Sia is far cheaper compared to popular competitor services, but this doesn’t mean that the service provided by SC is less reliable. The reason why other services such as Dropbox are much more expensive than SC is the fact that they use centralized company server storage that requires a lot of power and maintenance, which pumps up the price considerably.
Instead, Sia uses a totally different model that enables it to offer lower prices. There aren’t any central servers and data storage facilities where user data is being stored, which means all of the expensive maintenance and electricity bills are left out of the picture. All of the data users upload on the network is distributed between them and information doesn’t need to travel through a complex network between a central server and the end-user. When a user stores their data on Siacoin, the data is easily accessed by pooling together information from multiple sources which are actually other SC users that jointly provide storage space. This means that data is accessible faster compared to centralized storage networks.
Reliability is a big issue for storage platforms and users need to be assured that they can access their stored data at any moment. With centralized platforms that store user data on their company servers by renting their storage space, a cyber attack or power shortage can totally disrupt the whole network, leaving all platform users without access to their data until the issue is resolved.
Siacoin can’t have such issues, because there’s no central network authority that can shut down the whole network. The platform is blockchain-technology-based and if a single network node gets deactivated, any information that was stored on it still isn’t compromised because it can be pieced together from other network nodes that are also storing the same data.
Decentralized Storage System Security
When a successful cyber attack against a centralized data storage happens, all users may have their data were stolen, which can lead to other severe security issues if their emails and passwords or bank credentials were stored on the platform.
Such major hacks have happened numerous times during recent years, such as the Equifax credit reporting company hack or the Verizon partner data breach, both of which left millions of people exposed to severe security risks. This is all possible because centralized storage systems are left fully vulnerable once a hacker manages to penetrate their cyber defenses and find a SPOF (single point of failure). When a cyber attacker finds such a point, the whole network is compromised because of its centralization – as that means every component of the network is closely linked and leaves other parts of the network vulnerable.
With decentralized, blockchain-based storage platforms like Siacoin, if a hacker manages to compromise a single network node, they would only be able to access bits of scattered data, because network nodes don’t have full chunks of user data stored. Additionally, all data stored on Siacoin is automatically encrypted, which makes it even harder for an attacker to access it. Your data is protected by a unique private key which only you have access to and the network nodes where you’re storing data can’t see the contents of your stored files.
Passive Income for Hosts
When storing data on Siacoin, you’re actually using other people’s computers to store data. This would be quite insecure if your data was stored on the single computer of a complete stranger. However, given the fact that user data is distributed among numerous network nodes, such a storage solution is quite safe, especially because of the Siacoin encryption.
The main motivation for Siacoin storage renters is the monthly storage space rent they get paid in SC utility tokens for renting their hard drive space to users of the Sia network. This is what the SC coins are essentially used for, to pay storage rent. If you want to be a host, you can provide data storage options as a seller on the Siacoin network and create yourself a source of passive income as a storage host.
How Does Siacoin Work?
The technology behind Siacoin is rather simple and it relies heavily on the decentralized features of the SC blockchain. The network has two sides that interact with each other. On one side, there are users looking for storage services and on the other side, there are storage hosts that want to sell storage space on Siacoin.
Storage pricing is determined on a free-market basis, where the competition between storage hosts determines the price that is offered to buyers. Currently, the average monthly price for 1TB monthly storage on SC is between 1 and 2 USD.
Once a user decides to rent some storage space, their files first go through the Siacoin encryption process to make them safe from any data privacy breaches. After that, all of the data is divided into small blocks of information which are then distributed among numerous network nodes. The file distribution is carefully managed so that users can access their data real fast at any time.
Siacoin ICO and Distribution
Unlike many popular cryptocurrencies, Siacoin didn’t have a classic initial coin offering. The developer team raised an initial 1.25 million USD to jump-start the project and launch SC on the market. There’s no SC hard cap, which means miners can mine an unlimited supply of coins and the genesis block of the Siacoin blockchain was mined by the developer team, along with the first 100 blocks.
A special ASIC miner machine called Obelisk was also launched by the Sia team and the developers created a hard fork of the SC blockchain in 2018, making Siacoin mining only possible with Obelisk machines.
Popular Crypto Wallets for Storing Siacoin
Here’s a selection of the best Siacoin wallets on the market:
Sia-UI is a desktop wallet created specifically for Siacoins. It was developed by the Sia Team and is regarded as the official Sia wallet. The wallet is available for Windows, Linux, and Mac OS and provides all the necessary functions for safely storing SC. The official Siacoin wallet is a full node program which means your computer needs to be a Siacoin network node in order to use the wallet. You need to download the whole SC blockchain on your device to become a network node and this process can take some time, depending on your hardware and network connection but it is the safest way for storing siacoins.
A great thing with this official wallet is that the fact that you’re a full node of the Sia network means you can rent storage as a storage host and earn money. Sia-UI has been downloaded more than a million times, which means that there’s quite a large community around the platform.
Atomic Wallet is a very popular, secure multi-currency wallet on the market with more than one million users keeping more than 300 different cryptos in it. It’s one of the rare multi-currency crypto wallets that support Siacoin storage. Atomic Wallet is known for its great security and encryption that stores all of your private keys on your device.
You can use Atomic Wallet on your PC or laptop with Windows, Mac OS, Ubuntu, Debian, and Fedora operating systems, while the mobile app version of the wallet is compatible with Android and iOS devices and can be downloaded from the Google Play store and the Apple App store.
The seed phrase you receive when creating your wallet account is the main gateway to accessing your cryptos and you should keep both a digital and physical, written copy of the seed phrase. You can also set a password login for every time you want to open your Atomic Wallet app. If you want to exchange your siacoins for another crypto, you don’t need to use a crypto exchange because Atomic Wallet has a great integrated crypto exchange feature that allows exchanges between most of the supported cryptos in the wallet.
Ledger Nano S
If you plan to invest large amounts of cash in Siacoin, the best solution for storing the coins is in a secure cold storage device. The Ledger Nano S is one of the industry-leading hardware wallets that provide top quality, fully secure crypto storage and it supports Siacoin.
Ledger uses state-of-the-art encryption to securely store all your private keys offline, out of the reach of hackers and security breaches. The device enables you to protect your assets with a 12-word seed phrase, a password, and a PIN code. This is a multi-currency crypto wallet that supports a wide variety of coins and tokens. All you have to do in order to store your SC on it is to install the Ledger Sia app and then manage your siacoins through the Ledger Live manager interface.
Keep in mind that even when you manage your Ledger device through a computer or mobile phone, your assets are still kept safely offline on the device, because of the Ledger firmware that keeps your internet connection separate from the private keys on the device.
A Few Final Words…
The innovative approach to cloud storage services is something that makes Siacoin stand out from the thousands of altcoins on the market because it’s much more than digital cash. SC is a prime example of real-world use cases for cryptocurrency ecosystems that cater to the everyday needs of users worldwide, such as the need for high quality, affordable, and safe cloud storage.