The cryptocurrency industry is growing at an impressive rate and shows no signs of slowing down. Since its introduction in 2009, Bitcoin has increased in value by more than 7,000%, demonstrating a steady increase over time. Bitcoin was the first widely recognized virtual currency, and operated on a peer-to-peer network that allowed users from across the globe to perform anonymous transactions.
Bitcoin made it possible for its users to verify their transactions through technology called “blockchain,” which allowed the network to keep a record of any transaction that occurred. Many different peer-to-peer networks and virtual currencies have arisen through the use of blockchain technology, which has resulted in hundreds in different cryptocurrencies today.
The concept of a decentralized transaction network has captivated the internet and acted as the catalyst for a number of new technologies, such as those provided through Sia and Siacoin. Sia was developed shortly after Bitcoin emerged and has taken its technology to fuel a number of new concepts. Sia combines blockchain technology and cryptocurrency on a peer-to-peer network that was created in an attempt to create the largest cloud based storage network on the planet.
History of Sia
The concept of Sia was originally born from HackMIT in 2013. HackMIT is an unofficial event held at the Massachusetts Institute of Technology that allows students or hackers to come up with new and exciting ways to interact with technology. The concept was to take unused storage space across the globe and combine it in order to create a free, peer-to-peer data network.
Sia is a company that has taken a hold of the blockchain technology and used it in a variety of new and progressive ways. It uses this technology to give users a different approach to cloud storage that is truly one of a kind. The blockchain allows the network to reach a cryptographically secure census of data that can support smart contracts without interference from a third party.
Problems with Existing Cloud Storage
In recent years there has been a significant rise in cloud storage technology. Instead of relying on a device’s hard drive, consumers are able to subscribe to a cloud storage service that seemingly exists in space and offers them storage that can be shared across their devices, rather than in one single location. As cloud storage has grown in popularity, users have grown skeptical of the security of their data, which is being controlled by big name companies.
There is a lingering fear that cloud storage companies are taking personal information and trying to use it without the permission of the cloud storage users. There are also a number of documented instances where big name cloud storage companies have been hacked, leaving their users’ information vulnerable. Sia’s eliminates this fear.
Despite having competition with the likes of Apple, Google, Amazon, and Microsoft, Sia claims to have a network that creates the world’s fastest, cheapest, and most secure cloud storage platform. This is made possible through the implementation of a network of datacenters provided by its users. Now the question is “Where does crypotcurrency come into play?”
How Siacoin Works
Siacoin is the cryptocurrecny used by Sia. Blockchain technology is used in two different ways on the Sia network. The first use is, as mentioned previously, its cloud storage services. Siac and Siacoin may seem familiar to traditional peer-to-peer file sharing networks, but its differences are in the blockchain technology.
Unlike torrent based networks, Sia offers users encrypted file sharing across the network and stores data files across a number of different “nodes,” or hard drives, across the network. By decentralizing and encrypting the data, Sia is able to provide unprecedented data security. All of this is paid for with its very own cryptocurrency, Siacoin.
Siacoin is similar to other cryptocurrency in a number of ways. All siacoin transactions are confirmed through the open-source blockchain. This particular cryptocurrency is used to enable decentralized payments via file contracts. In order for users to utilize the services offered by Sia, they must pay for the amount of storage space they are interested in using. In order to pay for this storage, users must use Siacoin.
Contributing to the Sia Network
Anyone interested in making money by contributing to the computing technology needed to help Sia run can do so by essentially renting their free hard drive space. Users are rewarded with Siacoins based on the amount of hard drive space they offer to the Sia network. This concept is similar to mining in other cryptocurrency networks. The users that provide the computing power to help run the network are rewarded with the virtual currency.
Mining is also a way for users to earn Siacoin. Anyone who provides the computing power needed to complete the encryption puzzles needed to add to the blockchain will be rewarded with Siacoing. Like the majority of virtual currencies, Siacoin will be distributed slowly over time and has a cap, and when that cap is reached there can be no additional Siacoins produced or mined.
At launch, the initial block reward, or reward for providing the computing to add to the blockchain, was 300,000 Siacoins. This reward decreases by one until reaching block 270,000, at which point the reward for each block will be 30,000 Siacoins.
All users on the network are required to own Siacoins, which in addition to the cap on the number of coins in circulation will drive the demand and value of this cryptocurrency. As of June 2017, a single Siacoin can be purchased for as little as $0.01.
Sia also offers a second, less popular cryptocurrency called Siafund. Like Siacoin, Siafund has a cap on the number of units in circulation. In total, there are 10,000 Siafunds and all of them are pre-mined, meaning they aren’t released over time but rather released at one time.
Siafund adds a somewhat confusing component to the Sia network. Nebulous, Sia’s parent company. holds 8,835 Siafunds. The remaining funds were sold in a crowdfund with the purpose was of helping to finance Sia’s early development. This provided an alternative to collecting donations. For the most part, Siafunds lack the attention that Siacoin has received as a virtual currency.
Siacoin requires users to download what is called Sia-Ui, which acts as a virtual wallet for their Siacoins. The Sia-Ui gives users access to view all transactions taking place on the network, thus demonstrating the open-source blockchain. Through the Sia-Ui users are able to view their current balance, unconfirmed transactions on the network, their Siacoin balance, as well as a number of other functions.
Future of Siacoin
All of the intriguing aspects of cryptocurrency are present in Siacoin. Open source blockchain technology has taken off since the introduction of virtual currency and has become increasingly more popular in recent years. The ability to transfer funds seamlessly, with no fees and no personal information being exchanged has caught the eye of internet users all over the world. The increase in attention has even begun to open doorways for businesses interested in exploring the new technology as a way to handle their own transactions.
Siacoin offers an intriguing option for anyone interested in investing in virtual currency. It is unlike any other cryptocurrency in that its primary function is serving the cloud-based storage network it operates on. The fact that all Sia users are required to own Siacoin will really cause the value of this cryptocurrency to increase. This combined with the fact that it incorporates the fundamentals of more traditional curyptocurrencies shows some real promise.
Perhaps Siacoin’s biggest asset is also its biggest weakness. The fact that Sia acts primarily as a cloud based storage company takes away from its reputation as a cryptocurrency. Its success is dependent on its ability to create a user-base that is steadily increasing. People may be hesitant to invest in a cryptocurrency that has yet to really establish itself as a real contender. That being said Siacoin has shown positive signs of improvement and appears that it will continue this trend, while increasing in value.