Siacoin is still a comparatively young cryptocurrency. It is based on the revolutionary cloud storage service called Sia, created by David Vorick and Luke Champine of startup Nebulous Inc. What this revolutionary digital coin has to do with a cloud is explained in detail.
Since when does Siacoin exist and what is its value?
Sia and Siacoin have been around since June 7, 2015. The Siacoin price was then extremely low for a long time and hardly rose. In the spring of 2017, the price then suddenly picked up speed and reached on 23 June this year, a record high of about 1.8ct. After that came quickly the case again, the current value is about 0.4ct, the market capitalization of the Coin currently stands at 120.585.811,6 €. (As of September '17)
What is special about Sia?
Sia was originally just a cloud service, but completely different from traditional cloud storage. The Sia cloud is based on a decentralized, redundant architecture. This means that the stored data does not reside on a central server, but is broken up into many small pieces on thousands of different servers.
Of course, one advantage of this system is immediately obvious: A hacker who breaks the security barriers of such a server will not find any data that can be used by him, even if he is able to decrypt it. If he wants to have usable data, he would have to hack every single hoster whose place he does not know until he has collected all the data pieces.
Redundancy of the stored data
Of course, when using this system, there must also be some redundancy of the individual pieces of data in the cloud. Otherwise, if one of the hosters is not working, the user would not be able to retrieve their data because at least some of it would be missing. Redundancy means a multiple existing same records. If the server of a hoster fails, the respective data part is simply loaded from another server.
Completely independent
Of course, only the actual owner of the respective data possesses the algorithm for the correct data combination. Based on the blockchain, a veritable ecosystem of many independent hosters emerges. That's exactly what the inventor's vision is: An uncontrolled, independent cloud system whose files can only be owned by the original owner.
Payment of the hoster with Siacoin
Here comes the actual Siacoin in the game. Because with this cryptocurrency, the individual hosters can pay. The value of the coin and thus the hosting costs are therefore dependent on customary fluctuations. Yet, data storage rates are many times cheaper than the hosting offerings of well-known, centralized cloud service providers, such as Amazon, Google, or Dropbox.
One terabyte of data can be stored in the cloud of Sia for about 200 Siacoins, that is a mere 80ct per month. A real joke compared to central cloud services, where the Terrabyte costs at least 10-20 € and in addition can not even offer such independence and security.
You can buy Siacoins in two different ways. On the one hand you can trade Siacoin, like many other crypto currencies, but on the other hand also for Bitcoins.
What technology is behind Siacoin?
In order for Sia and the associated Siacoin to function as it should, specific systems and their protocols are used.
The Reed-Solomon code based data distribution
Here, all data is quickly and reliably disassembled into individual parts of 4 megabytes, as soon as they arrive in the Sia client. Then these data parts are sent to the individual hosters and stored there. Before that, however, the data parts are still encrypted so that even individual data fragments become unreadable for the host.
Data encryption with the Twofisch algorithm
So that even individual parts of the stored data are unreadable for hosters or possible hackers, the whole thing is encrypted. The algorithm used for this is called Twofish. This is the successor of the so-called Blowfish and belongs to the family of symmetric encryption algorithms. That is, for decryption a very specific key of 128 bits. Keep in mind that every single 4mb piece of data has its own unique key. So if someone succeeds in decrypting a 4Mb piece of data in a 100Mb file, he theoretically would have to crack 24 other 128Bit codes.
Peer-to-peer protocol
All data exchange takes place exclusively on a peer-to-peer basis. This means servers that communicate with each other do so directly using the P2P protocol. So the data does not run through a central server on which they could be intercepted. This type of communication is already being used in various other services, such as the already controversial BitTorrent networks.
Through these networks, users exchange data without third parties having any control over the exchange of data. For exactly this reason, copy-protected, illegally reproduced data are often exchanged by means of the Peer2Peer protocol. However, this does not automatically mean that this protocol is also illegal. For such an independent cloud network, peer-to-peer is simply essential.
Secure processing through so-called smart contracts
Smart contracts, as the name implies, are protocols that automatically and technically conclude and execute contracts between two parties. This will automatically secure the buyer's storage for his data as soon as he pays. On the other hand, it is true for the hosters that they only receive their siacoins if they can provide the data for the corresponding period of time without much off-time. So these smart contracts can save both hosters and customers unnecessary hassle - despite the large barely transparent network of the cloud. This Smart Contract is also known from the much better known cryptocurrency called Etherium.
Conclusion
In conclusion, Siacoin is very different from other, better known, digital currencies. Although you can mine Siacoin, but clearly is not the coin itself in the foreground, but the revolutionary cloud service. Siacoin is a means to an end, so that the many individual hosters can be paid. Without this cloud storage unit, Siacoin would not exist at all.
So Siacoin is less likely to make big profits, as seen by its low value. However, it may be worth paying the coins for one or the other to your own hosting fees, unless you exclude the option to purchase Siacoin on Bitcoin.
Thank you for reading!
Don't forget to upvote, resteem and follow me for more content & contest
Tradingview, https://www.tradingview.com/u/Tradewonk/
Instagram, https://www.instagram.com/tradewonk/
Or any of my other social media channels. Please consider getting your
free account here on Steemit.
"Join the adventure and be inspired." - Tradewonk
