Which Decentralized Storage Is Best?

The online data storage space is rapidly evolving as decentralized solutions continue to bite into the traditional storage market. Currently, three widely known decentralized storage platformsFilecoin, Arweave, and Storjoffer solutions that individuals and businesses can't ignore due to their security, cost-effectiveness, and resilience.While these platforms have the same value proposition, decentralized data storage, they don't

The online data storage space is rapidly evolving as decentralized solutions continue to bite into the traditional storage market. Currently, three widely known decentralized storage platforms—Filecoin, Arweave, and Storj—offer solutions that individuals and businesses can't ignore due to their security, cost-effectiveness, and resilience.While these platforms have the same value proposition, decentralized data storage, they don't offer the same services.

What Is Filecoin?

Filecoin is a cryptocurrency-backed decentralized storage platform launched in 2017 by Protocol Labs. It was built to offer better storage services than traditional server-based and cloud storage. In the ecosystem, miners offer their extra storage space for use in the network, and in return, they earn Filecoins from users who pay to host their data in the space.

The network is built on the IPFS (Interplanetary File System) and bolstered by blockchain technology to incentivize users' worldwide storage contribution, hence decentralizing storage services. For reference, the Interplanetary File System is a decentralized file storage system.

To keep the network secure, Filecoin uses cryptographic protocols that provide access to authorized personnel. In addition, it uses both the Proof of Space-Time and Proof of Replication consensus algorithms, which ensure miners indeed have the space they claim and have a replica of the data provided by the network. This ensures easy access and immutability of data.

What Is Arweave?

Arweave is a decentralized data storage solution founded by Sam Williams in 2017 to address data permanence and immutability on the internet. Its decentralized storage system stands out due to its ability to store data in a decentralized manner forever.

It's based on the hope of diminishing cost of data storage, which takes a leaf from Moore's law. Essentially, the decreasing cost of data storage presents an opportunity for Arweave to provide indefinite data storage at a finite cost. So users who wish to store data on the network pay a one-time fee of about 1 cent per megabyte for 200 years of storage. Then the interest accrued is used to cover the declining cost of storage over the years.

Arweave uses a combination of Proof of Work and Proof of Space where miners store data to mine block, a technique known as "blockweave." The stored data becomes the basis for mining and is rewarded with AR, Arweave's native token. Also, the data stored is guaranteed permanence by the miners' long-term economic incentive, eliminating the need for data replication.

What Is Storj?

Storj is a cryptocurrency blockchain designed to empower normal users to turn their computers into nodes that rent out extra storage to customers (using regular operating systems). It was founded by Storj Labs in 2014 but later underwent restructuring in which it moved from Bitcoin to Ethereum to its blockchain, Storj Network, in 2019.

It uses satellites to coordinate traffic between uplinks (client-side applications) and nodes. Satellites verify nodes and add them to the network. They also compress, encrypt, and segment data and distribute it across the nodes, ensuring data redundancy and preventing censorship or tampering.

Once every hour, random requests are sent to every node to cryptographically prove that they have a copy of the data provided. In return, the nodes earn STORJ tokens for storing and maintaining the data. Its reliance on a distributed network of computers worldwide makes it a great alternative to traditional cloud storage systems.

Filecoin vs. Arweave vs. Storj: A Quick Round-up

Here's a quick comparison of the three decentralized storage services

Filecoin

Arweave

Storj

Protocol

IPFS

Blockweave

Storj DCS

Consensus Mechanism

Proof of Replication and Proof of Space/Time

Proof of Work and Proof of Access

Proof of Storage

Data Permanence

As long as nodes are incentivized

Guaranteed

As long as nodes are incentivized

Economic Model

Continuous periodic payment

On-time payment

Continuous periodic payment

Cost

Not defined

Starts at $4.55/gb (Subject to change

Starts at 25GB for Free

As you can see, there are several factors to consider when choosing the right decentralized storage service.

Similarities of Filecoin, Arweave, and Storj

The three blockchain-based storage platforms were all created to offer decentralized storage services with advantages over traditional storage systems. At the very least, they have several structural similarities and one common derived benefit.

  • Decentralization: By design, Filecoin, Arweave, and Storj leverage space provided by contributors. Participants in all three networks are verified before joining the ecosystem to provide storage infrastructure. Filecoin uses IPFS, Arveave uses "blockweave," and Storj uses Storj Network, all unique protocols for decentralized data storage. Yet they all use networks of nodes to provide data storage services that are resilient and resistant to censorship. Unlike traditional data storage systems, they offer better data access and storage autonomy.
  • Incentive Mechanism: Each platform has an incentive mechanism designed to sustain the network of nodes supporting the ecosystem. Filecoin pays filecoins to miners, Arweave pays AR to "farmers," and Storj pays STORJ tokens to its node operators for storage space. Meanwhile, users of the platforms pay using native tokens to store data in the network. As such, this system transfers value between storage providers and users, ensuring the continuity of the ecosystem. Notably, the incentive mechanisms are all built on blockchain technologies.
  • Data Encryption: All three platforms implement end-to-end encryption to ensure data security and privacy. Data is encrypted on the client side before being uploaded to the network, and only the data owner retains the encryption keys. This approach protects data from unauthorized access, even though it is stored on a decentralized network.
  • Cost Effectiveness: By design, these platforms don't require new, expensive data storage infrastructure to run like traditional storage systems. Instead, they utilize excess storage capacity from willing individual participants worldwide. Consequently, they are cheaper to set up and can provide highly competitive pricing for their storage services. For instance, a comparison by Coingecko found that decentralized storage platforms are, on average, 78.6% cheaper than centralized storage platforms.

    • Based on these similarities, it's easy to assume that they all serve the same purpose and could be used interchangeably without any difference. However, that's not the case.

    How Do Filecoin, Arweave, and Storj Differ?

    While Filecoin, Arweave, and Storj share several fundamental similarities, they all have unique features and technical implementations. Also, they aim to solve the issue of data storage centralization on the internet using unique techniques. Arweave is particularly different from the other two.

  • Technical Design: Filecoin uses IPFS, a peer-to-peer protocol for data storage across a distributed network of nodes. Arguably, IPFS is fundamental to Web3. Meanwhile, Arweave is designed with the principles of blockchain technology in mind, as data is stored in blocks similar to transactions in the blockchain, a protocol known as "blockweave." Lastly, Storj uses the Storj DCS protocol, which involves nodes, uplinks, and satellites to store and maintain decentralized data storage.
  • Consensus Mechanisms: By their technical designs, the three platforms use different consensus mechanisms. Filecoin uses both Proof of Replication and Proof of Space-Time, Arweave employs a combination of Proof of Work and Proof of Access, while Storj implements the Proof of Storage mechanism. These mechanisms have unique implications for the networks' performance, scalability, and sustainability.
  • Data Permanence: Filecoin focuses on providing long-term, uncensorable data storage services as long as miners maintain their nodes. Similarly, data stored in the Storj network will remain secure and untampered as long as the nodes in the network continue to receive incentives. Neither Filecoin nor Storj guarantees data permanence, but Arweave does. Data stored in the Arweave network remains permanent and immutable.
  • Economic Models: Arweave employs a one-time payment system to maintain the network for 200 years. It bases its economic model on the diminishing cost of data storage, eliminating recurrent payments from storage users. On the other hand, Filecoin and Storj require continuous incentivization of storage providers for stored data to remain in the network.

    • The differences among these platforms make each suitable for different use cases and applications under the collective need for decentralized storage.

    Filecoin vs. Arweave vs. Storj: Pricing

    Due to their dependence on a constantly changing network size, decentralized data storage platforms have an ever-changing pricing model. In addition, how their native tokens perform also influences the storage cost.

    For instance, Filecoin doesn't have a well-defined pricing structure. Instead, storage price varies with time as more nodes join the network. To get a precise cost outline, you'll need to fill out the Filecoin online onboarding form.

    Almost similarly, Arweave's storage costs depend on the network size but are modeled on diminishing data storage costs. Nonetheless, Arweave's online calculator gives you a good approximation of the fees at any given moment. Currently, 1GB costs 0.858 AR (approximately $4.55)

    Storj took a different direction. While the cost of data storage also varies with the size of the network, it transparently outlines its pricing models. It has three tiers:

    • Start for free: 25GB storage limit and 25GB egress
    • Pro package: $4/TB storage and $7/TB egress
    • Enterprise: Subject to inquiry

    Generally, pricing on decentralized storage platforms is more complex than with traditional data storage systems. Hence, more care is needed to determine the proper data storage.

    Which Decentralized Storage Is Right for You?

    Filecoin's market-driven approach may benefit dynamic and frequently accessed data, while Arweave's focus on permanence might be ideal for data archiving and long-term preservation. Storj's decentralized model can appeal to users looking for cost-effective and secure data storage options. Ultimately, the choice between Filecoin, Arweave, and Storj will depend on your business's or personal needs and requirements.

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