🤔 What is Storj?
Storj is a decentralized, peer-to-peer, encrypted cloud storage solution. It connects users in need of cloud storage with those who have spare hard disc space.
It is like BitTorrent, a peer-to-peer file distribution system. But unlike BitTorrent, storage providers are payed STORJ tokens for storing files.
Just how Airbnb allows anyone to rent out extra room in their homes, Storj allows anyone to rent out unused space on their hard discs.
💡 What role does STORJ token play ?
STORJ is the native currency for Storj ecosystem. All the transactions are denominated in terms of STORJ token.
Users pay storage providers STORJ token for using disc space.
📝 Origin of Storj
- Shawn and John Quinn found Storj in 2014 on Bitcoin blockchain as SJCX. The team raised 910 bitcoin by selling 50 million SJCX the same year.
- The project migrated to Etherium blockchain in 2017. Legacy SJCX tokens were discontinued. The outstanding SJCX were eligible for conversion into STORJ at rate of 1:1. The team raised 30 million US dollars by distributing additional 72 million STORJ tokens to public.
- The team incorporated Storj labs in May 2015, a for-profit company. Storj labs provides an easy-to-use front end to access Storj network for storing data.
- He did his bachelor’s in computer science from Morehouse College in 2014.
- Shawn founded Storj in May 2014 and worked as its CEO.
- He stepped down from the post of CEO for more experienced Ben Golub, who had experience working as CEO of Docker for over 4 years.
- He did his BA in Economics and Russian language from Wake Forest University.
- He has over 15 years of experience in investment banking.
- He confounded Storj in 2014.
😌 What problems does it solve ?
- Users only pay for what they use, unlike traditional cloud storage providers which provide just a few one-size-fits-all solution with little flexibility.
- Unlike traditional cloud storage providers, Storj does not have to pay for:
- Running large server farms.
- Hiring an army of network architects.
- Buying land for running operations
- Advertisements and marketing.
- Fast: Centralized cloud solutions are slow because the user has to squentially download the data from a faraway server. Whereas in Storj, storage nodes compete to provide data as fast as possible, while the user downloads data parallelly from nodes to create the complete copy as fast as possible.
- Centralization of the web: There are just a handful of companies that control majority of the internet. This has lead to accumulation of power and single points of failure.
Centralization of storage presents a standing target that enables corrupt governments to censor the internet eg China, Venezuela etc.
- No privacy:
- We cannot be sure that cloud storage providers are not selling our data.
- Whereas in Storj, files are encrypted and split into 80 pieces, each stored with a different node. The nodes cannot see the data they are storing because it is encrypted and incomplete.
- We trust that the storage providers will keep our data safe but their track record says otherwise.
- Whereas, it is very difficult for a hacker to access data on Storj:
- Data is not stored at a single place, hence many nodes need to be hacked.
- Retrieved data needs to be decrypted.
- Efficient: Everyone has spare idle space in their hard disks which can be put to use for financial rewards.
- Open source code:
- Storj’s code is open source. Anyone can see how their data is being encrypted, stored, and retrieved.
- Whereas, one cannot see and audit the code of central cloud solutions.
🤖 How does it work ?
Following steps are involved in storing and retrieving the data:
- File is encrypted using AES-256-GCM symmetric encryption.
- Encrypted file is then split into 80 pieces.
- These pieces are geographically distributed and stored in storage nodes.
- These nodes provide proof at regular intervals that they are storing the data.
- The file is repaired by storing the piece on new node, in case a node goes offline.
- Only 29 out of 80 pieces are required to retrieve the file.
- Nodes compete to provide the pieces once the user requests the data.
- Pieces are reconstituted and decrypted to assemble the actual data by the user.
- Setup Storj node:
- Store files on Storj:
🏛️ Governance model
Storj project’s codebase is maintained and developed by Storj labs. This exposes the project to risks related to centralization in terms of governance ie:
- Differences among founders
- Government crackdown
- The team does not have to keep their word eg increasing max supply of STORJ token.
🤑 How much money does Storj project have for future development ?
- The team raised 910 bitcoin in 2014.
- They raised an additional 30 million US dollars in ICO sale in 2017.
- The team incorporated Storj Labs, a for-profit company in May 2015. Storj labs provide easy to use front end to access Storj network for storing/retrieving data.
- Network effects: More storage providers will attract more storage buyers and vice versa. In case, Storj is able to set the ball rolling it will enjoy exponential growth and build a strong moat.
- Data growth: More people are coming online and are saving an ever-increasing amount of data, increasing demand for online storage solutions.
- Switching cost:
- Users would not want to switch once they have successfully stored their data on Storj.
- Nodes would not want to switch once they have invested time in assembling their hardware and acquiring STORJ token.
😨 Risks & challenges
- Storj is a centralized protocol being maintained by a single private company. There is no guarantee that the company will not face difficulties like internal disputes, government regulations, lawsuits–for selling unregistered securities, etc.
- Storj can be used for storing illegal files like child porn etc. The team has not disclosed any plans to moderate such content.
- Storj is built on Etherium. Etherium’s high gas fees limits its adoption and usage.
STORJ has fix max supply of 425 million tokens. They have been distributed as follows:
STORJ token does not have any inflation because it has fix max supply which is already in circulation.
Token’s price increases due to demand pressure.
Demand pressure on STORJ token will come from:
- Users: They will acquire STORJ tokens to buy storage space.
- Speculators: They will buy STORJ tokens in hope of future price appreciation.
Supply pressure on a token decreases its price.
Supply pressure on STORJ token will come from node operators, who will sell part of their earnings to cover operational costs.
Storj is going after the same market and is similar to Filecoin project. Their market cap are:
Cloud storage is a multi-billion industry, growing at an exponential rate.
STORJ token has tremendous room to grow even if it can capture a small portion of the market.
🧐 Indicators to watch out for
- Google trends for cloud storage:
- Their youtube channel is growing:
- Their Twitter account is growing:
Cloud storage was invented because we ran out of hard disk space – things seem to have come a full circle 😄
I expect many decentralized projects to take advantage of Storj infrastructure. One can Use ENS or Unstoppable domains along with Storj to host a website that can not be taken down. Imagine WikiLeaks having such an option when it was founded 🤩
Storj opens up the possibility of decentralized websites that run on their own by generating revenue selling services and buying storage space on Storj🤖.
The team has a working product, all that remains is to fine-tune the project and scale the existing model.