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How Blockchain will Disrupt Cloud Technology

Among many other industries and sectors, Blockchain technology is poised to majorly disrupt data storage and cloud computing in the next 5-10 years.

Instead of storing files and information on centralized servers such as Google Drive, Dropbox or Amazon S3, platforms like Sia or Storj use Blockchain technology to decentralize data storage by breaking up files into multiple pieces, encrypting, and sending them to hard drives located all around the world. Individuals and private businesses can participate by renting out their unused hard drive space and make money. The above-mentioned projects have launched their own cryptocurrencies (Siacoin, Storjcoin, etc.) in order to incentivize usage and to create a market for buying and selling decentralized storage.

Advantages of a Decentralized Cloud

So what are the main advantages of decentralized cloud against private centralized cloud such as S3, IBM, Dropbox, etc. ?

  • More security & privacy. Decentralized data is also more difficult to attack than centralized data. On a decentralized network, files are broken apart and spread across multiple nodes. The files are encrypted with a private key which makes it impossible for the node to look at your file. Moreover, the files are just a fraction of their original self which render the reading of their content impossible.
  • File loss prevention through redundancy in data (extra copies stored in case of error in storing or transmission of data).
  • Cost reduction due to more efficiency. Blockchain storage costs can reduce the price of cloud computing between 50 and 100%. Storj VS Amazon S3 vs Microsoft Azure
  • Increased speed due to servers proximity, scaling effects and fragmentation of data (smaller fragments can be saved and retrieved concurrently).


Decentralized storage will also likely surpass most centralized services in terms of speed. Here is a short description of the most promising current projects :

  1. IPFS/Filecoin: InterPlanetary File System (IPFS) is a content- addressable; P2P hypermedia distribution protocol designed to create a permanent and decentralized method of storing and sharing files. Nodes in the IPFS network form a distributed file system that can be accessed in a variety of ways (for instance via FUSE and over HTTP). A local file can be added to the IPFS file system, making it available to the world. Files are identified by their hashes and are distributed using a BitTorrent-based protocol. Filecoin is the second layer of the project, the digital currency created to incentivize data storage on the IPFS netork.
  2. Sia: Open-source software & company that provides decentralized cloud storage technology by splitting apart, encrypting and distributing files across a decentralized network. Sia does not accept payments from customers but only provides a platform where providers run their own private decentralized cloud.
  3. Storj:Company based on Ethereum and P2P protocols that provides secure, private and efficient cloud storage. Storj utilizes file-sharding/fragmentation to store data and protect it with end-to-end encryption.
  4. Maidsafe: Company that aims to create a new backbone, on which data can be stored, accessed and exchanged. The network is made up of all the Upwork Blog post participants who contribute their computing capacity in peer-to-peer fashion. Decentralised Applications (dapps) can be built on Maidsafe. In summary, decentralised storage projects could benefit individuals and businesses by protecting and securing their personal information at a much lower cost. Companies such as Siacoin and Storj can easily disrupt the space if they establish partnerships with the industry giants. If they manage to do so, Google and Apple could start using their services as back-end platform for storage in order to reduce costs and offer their customers more reliable and consistent uptime.


In the coming years, the entire cloud computing industry will likely be disrupted by blockchain technology. All parties (clients, industry leaders and blockchain companies) have the potential to benefit from this kind of industry-wide change. However, centralized cloud providers like Dropbox and Amazon, could suffer, see their margins decrease, and even become outdated, overpriced and obsolete if they do not find ways to integrate and evolve with the advances that blockchain tech is bringing to the table.