Siacon (SC) is a cryptocurrency and blockchain solution that could make through a product with an enormous market.
The product is cloud storage and the cloud-storage market is enormous and growing. For example, Allied Market Research forecasts the cloud storage market’s value could grow from $46.12 billion in 2019 to $225.25 billion in 2027.
In contrast, Fortune Business Insights predicts the Cloud Storage Market could grow to $390.33 billion in 2028 from $76.43 billion in 2021. The cloud storage market is growing at a rate of 26.2% a year, Fortune Business Insights estimates.
The largest player in the cloud storage market is Amazon Web Services (AWS), an Amazon (NASDAQ: AMZN) subsidiary. AWS’s quarterly revenues grew from $1.05 billion in the first quarter of 2014 to $14.809 billion in the second quarter of 2021, Statista estimates. Hence, AWS’s quarterly revenues grew almost fifteen-fold in just seven years.
A Decentralized Cloud Storage Platform
Thus Siacoin is selling a product for which there is an enormous marketing and a growing demand. To explain, Sia is a decentralized cloud storage platform.
Sia tries to limit expenses because it has no servers. Instead, they build Sia in the blockchain. They claim the current Sia blockchain connects users to 617 service providers that offer four petabytes of cloud storage capacity.
A petabyte contains 1.024 terabytes or one million gigabytes of storage. Hence, Sia claims to offer 4.096 billion terabytes or four million gigabytes of cloud storage capacity.
Currently, Sia claims 1.654 Terabytes of its cloud its storage capacity is in use. Hence, Sia can offer 2.442 terabytes of cloud storage for rent.
Sia claims it can lower the cost of cloud storage by 90%. Sia boats it costs $1-2 to store a terabyte of data in its cloud for a month. In contrast, Sia claims it costs $23 to store a terabyte of data in Amazon’s S3 cloud.
Sia claims it can offer these low prices through a decentralized cloud storage market place. Renters pay for cloud storage using Siacoin (SC) which users can mine and trade. Sia claims users had downloaded its solution 1.2 million times on 5 September 2021.
How Sia Decentralized Cloud Storage Works
Here is how the Sia ecosystem provides decentralized cloud storage. First, the Sia software divides files into 30 segments before uploading.
Sia protects each file segment with Reed-Solomon Erasure Coding. Erasure Coding is a proven technology used in CDs and DVDs. Using Reed-Solomon allows Sia to divide files in a redundant manner, in which any 10 of 30 segments can fully recover files. Theoretically, if 20 out of 30 Sia hosts go offline, a Sia user could still download her files.
Sia provides security and privacy by encrypting each file segment separately. That provides more encryption than traditional cloud storage providers, such as Amazon Web Services. The level of security is higher because a hacker will have to decrypt each segment to crack a Sia file. Sia uses the Threefish algorithm for encryption.
They send files to Sia hosts through smart contracts. They create a smart contract or file contract for each renter on the Sia blockchain. The file contract serves as a cryptographic service level agreement (SLA) that administers the data.
Sia automatically renews contracts by setting aside Siacoin to spend on storing and transferring data. Sia automatically moves renter data to new costs in file repair. The Sia file contracts typically last 90 days.
Siacoin (SC) is scalable
Sia’s blockchain automatically enforces the SLAs. Each SLA is a digital robot or DApp. Renters pay for storage with Siacoin (SC).
Meanwhile hosts deposit Siacoin into every file contract as collateral. The hope is that the collateral will give the hosts an incentive to maintain the storage. To explain, the host could lose the collateral if he fails to provide the storage.
Hosts submit storage proofs at the end of a file contract. Storage proofs are Merkle Trees to post proof of storage on the blockchain. If Sia does not receive the storage proofs, the host is not paid. Instead, the host forfeits the collateral as punishment.
A sidechain is shortcut around the blockchain’s encryption. Blockchain is slow and has limited capacity because of the encryption. This is the blockchain scalability problem. Sidechains are faster because they have less encryption. However, sidechains are more vulnerable to hacking.
One advantage to this arrangement is that sidechains are scalable. That means Sia built a potential solution to the blockchain scalability problem into its system.
What Value does Siacoin have?
Mr. Market gives Siacoin (SC) a lot of attention, and a little value. For example, CoinMarketCap listed Siacoin (SC) as the 10th most trending cryptocurrency on 5 September 2021.
Conversely, CoinMarketCap listed Siacoin as the 98th most valuable cryptocurrency on 7 September 2021. CoinMarketCap gave Siacoin a Coin Price of 19.18₵, a Fully Diluted Market Cap of $931.206 million, and a 24-Hour Market Volume of $3175.708 million on 7 September 2021. They based those numbers on a Circulating Supply of 48.81 billion SC and a Total Supply of 48.818 billion SC.
In contrast, Coinbase gave Siacoin (SC) a Coin Price of 2₵, a Market Cap of $976.5 million, and a 24-Hour Market Volume of $171.9 million on 7 September 2021. They based those numbers on a Circulating Supply of 48.88 SC.
Siacoin is an interesting cryptocurrency for speculators because it will be used to pay for a popular product in a growing market. If you are seeking a cryptocurrency that could grow with the cloud hosting market, Siacoin is worth examining.