Crypto Tales #3: Sia, Siacoin and the beginning of decentralized file storage.

in #cryptocurrency4 years ago (edited)


Sia was first conceived back in September 2013 by two undergraduate Computer Science students named David Vorick and Luke Champine at the HackMIT 2013 convention. Most cryptocurrency projects at the time only focused on just that, currency. However David and Luke wanted to see past that "Bitcoin inheritance". They saw a better system that could have intrinsic value for the Siacoin holder by using their tokens as a medium of payment for renting file storage. And Sia was born.

How it all started

Vorick and Champine founded Nebulous Inc. in May 2014. And its initial funds were acquired through an initiall seed of $750K from investors.

The first public beta released in March 2015. After that, the first release was in June 2016 with version 1.0.0.

The Sia network

The concept was to create as previously said a decentralized storage system that no one would control and that would incentivize people to rent out their unused storage space and bandwidth to earn Siacoin ($SC). The basic difference between Siacoin and other cryptocurrencies such as Ethereum or Bitcoin was that it had a "File Contract" similar to what we know today as smart contracts. These File Contracts provided a way for hosts (those people renting their storage space) to get paid by proving they had stored a certain file over a period of time. As it is expected, all data and files are encrypted before being uploaded to the Sia network and only the owner can decrypt them again.

In further versions of the Sia network, very important upgrades were added such as redundancy (to avoid loss of information and add another layer of security) and error correction. This was done by splitting the date to be stored in pieces and storing each piece in more than one place, thus minimizing the chances of data loss. Also, the network is optimized to always use the cheapest available storage capacity.

Right now, Sia's file contracts allow for mothly storage costs of about $1 - $3 per TB, which is way cheaper compared to services that are offered by internet giants such as Google or Amazon.

The token behind the Sia network, Siacoin ($SC)

Siacoin ($SC) is the token used to buy and sell storage space on the Sia network. Siacoin uses a PoW (proof-of-work) consensus protocol that uses BLAKE2b as its hashing algorithm, which is an algorithm designed for 64bit platforms and performs incredibly well in newer machines.

The target blocktime of the Sia network is of around 10 minutes, so very close to that of Bitcoin. The developers mined the first 100 blocks before releasing the source code and miner to the public. So there was no premine appart from that. The initial reward was of 300.000SC, and then one less for every block mined (so 299.999, 299.998, and so on...) until block 270.000 where the reward will reach 30.000SC and it will stay like that forever.

Each Siacoin can be split into 10^24 pieces, called hastings, which are way smaller than we are used to in other cryptocurrencies, with Bitcoins smallest unit being a "Satoshi" or 10^8 pieces of a Bitcoin. The reason behind being able to split Siacoin into such small fractions is that Sia often relies on very small payments, way smaller than Bitcoin could possibly handle.

Right now, each Siacoin is worth around $0.013 and is the 32nd biggest cryptocurrency by market cap,  having reached an all-time-high of $3.08Billion in January 2018 before Bitcoin plummeted downward of the 20K mark. 

If you liked Crypto Tales #3, make sure to hit that upvote and follow buttons, and check my profile for the other Crypto Tales articles! Thanks for reading!


Make sure to leave a comment on what do you think is going to be the future for Siacoin and what coin you would like me to review next!

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