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How blockchain storage could benefit the enterprise
Whether your organization is a potential buyer or seller of blockchain data storage, the technology could change how you look at storage. Discover where blockchain is headed.
Blockchain storage is still in the early stages of development, and many believe it isn't ready for prime time, especially when it comes to handling large volumes of data. Even so, two primary roles have emerged that could drive blockchain data storage in the enterprise: selling excess storage and leasing storage from one of the emerging blockchain service providers.
Blockchain is a distributed ledger technology that acts as a decentralized database for recording transactions between various parties. A blockchain ledger records transactions chronologically, as a series of blocks. Each block references the preceding one, forming an interconnected chain. A blockchain ledger is distributed across multiple nodes, and transactions are automatically validated and synchronized across all nodes. Ledgers are transparent and verifiable, eliminating the need for a central authority or third-party verification.
This technology is now being combined with peer-to-peer (P2P) decentralized storage, creating a pool of geographically dispersed storage resources that serve as the nodes for blockchain storage.
Selling excess storage
Organizations wanting to monetize surplus storage can participate as farmers in a blockchain-based storage network, leasing one or more storage nodes to services such as Storj or Sia.
Storj, for example, plans to launch its cloud-based object storage service in 2019. Potential farmers must sign up for the Storj waitlist, providing information such as the amount of available storage and bandwidth, as well as the average downtime.
Because sharing excess storage through this type of service is a new concept, it's too soon to say how it will work for IT teams trying to juggle their own resources, while ensuring that data is fully protected and complies with applicable regulations and standards.
At the very least, participating organizations must have the ability to reclaim their own storage capacities when needed. They must also be confident that no third-party data stored on their systems could affect those systems or their own data. Plus, they must be compensated enough to make all this effort worth the trouble, and it's this concern that could prove to be the biggest roadblock.
Leasing blockchain storage
Organizations wanting to lease storage from a blockchain-based storage network would use a service provider such as Storj or Sia. There are a number of advantages to this approach compared with centralized storage in an on-premises or cloud-based data center.
Blockchain distributed storage can be a lot cheaper. For example, Storj lists its storage services at about $15 per TB per month and Sia at about $2 per TB per month. Compare these prices to Amazon's S3 standard storage and Google's multiregional cloud storage, which start at about $21 per TB per month and $26 per TB per month, respectively. The lower prices aren't surprising, however, because, with distributed storage, service providers don't have to maintain massive server farms.
Enterprises using blockchain for storage save in other ways. They don't have to purchase the initial equipment, replace equipment when needed, buy and maintain management software, and provide the administrative resources to keep everything running.
Blockchain data storage also offers more transparency than a cloud provider. Transactions are immutable, verifiable and tamper-resistant. In addition, blockchain technology can provide greater levels of availability and fault tolerance because the data is distributed across multiple nodes. Data also can be accessed within closer proximity to where it's stored, resulting in application performance gains.
Many proponents of blockchain storage believe the approach is more secure than centralized storage because the data is spread out across many data points, rather than being collected within a single ecosystem. For example, if a cloud provider gets hit with invasive malware, it could conceivably spread across all its data centers, even if they're geographically dispersed. The odds of this happening with distributed storage are much slimmer. Plus, the amount of redundancy with distributed storage helps protect against data loss that can result from other types of events.
The early stages of blockchain for storage
There's another way that blockchain data storage could be used. With this approach, a group of organizations would set up its own P2P storage network for sharing storage among themselves, each offering storage resources when available and consuming storage resources when needed. They might even bring in additional farmers to help augment their requirements. However, this approach would likely be considered only for specialized circumstances, such as a group of universities coming together to share storage resources.
Because of the flexibility and advantages that blockchain data storage could offer organizations, other use cases are likely to emerge, particularly as the technology matures and the number of participants grows. But blockchain storage still has to prove itself before it will gain widespread acceptance. IT teams must be convinced that it will effectively scale and that data will be protected. Anything less and the use of blockchain for storage will likely make little headway in the enterprise, except perhaps under the radar as shadow IT.