Amazon started as an e-commerce website for shopping, but today it is mostly known for Amazon Web Services (AWS). This part of its business accounts for the largest proportion of Amazon’s profit, indicating how cloud computing has become incredibly popular. If you’re like most people, you probably back up data to the cloud provided by one or more companies. Sia is also in the same business, except that instead of backing up data to a single company, it makes use of blockchain technology. It is not the only crypto project that does this, but it certainly is one of the most interesting. If you happen to be curious about the tech or the coin as an investment, keep reading to find out everything you need to know about Siacoin.
Everything you need to know about Siacoin
Sia is a decentralized cloud storage platform that utilizes a blockchain to incentivize payments. On Sia, you can lease storage space just like you would on AWS, get paid to host the space, mine Siacon, or even contribute to the project. It is different from the existing cloud storage suppliers that are centralized. On those platforms, expenses are high and information is often unencrypted. That is because every supplier normally runs just a few enormous server farms. Sia, on the other hand, takes into consideration private, decentralized, appropriated distributed storage at a far lower cost. (Read more on: Dogecoin (DOGE) Price Prediction And Forecast For 2020)
This system utilizes the digital currency Siacoin to empower decentralized payments by means of digital contracts. All transactions on the system occur in Siacoin, which is the native currency of the network. Siacoin permits us to do things that would not be conceivable with Bitcoin or customary online payment service providers. (It’s time to: Find Out More About Tezos and Its Price Prediction For 2020)
Sia was founded by David Vorick and Luke Champine of Nebulous Inc, a VC-supported startup in Boston. The initial idea of Sia was initially conceived at HackMIT 2013. Imagine the possibility of being able to combine all the free and unused storage space in all computers of the world and join it into an overall free market for storing data.
To achieve this, Sia uses the power of blockchain innovation to enable distributed systems to reach a consensus in a protected and trustless manner. Smart contracts based on cryptocurrency guarantee the encryption and flow of information with no opportunities for an outsider to meddle in any capacity. Therefore, Sia is another way to deal with distributed storage systems. Rather than all datacenters being possessed by a solitary organization, Sia opens the way and permits anybody to earn extra cash by leasing their hard drive space. (These are the: Most Secure and Regulated Stablecoins of 2020)
This makes Sia a decentralized system of data centres that, when combined together, create the world's quickest, least expensive, and most secure distributed storage stage. Today, being a significant distributed storage player requires having multiple data centres, building trust inside the market, marketing to clients, and contending with mammoths like Amazon, Google, and Microsoft. Breaking into this market is a multi-billion dollar attempt. The end objective of Sia is to be the most widely used storage layer of the Internet. They accept information ought to be free. They expect to free the unused bits of the world and develop the biggest data super-server on earth. (Be aware of the: OmiseGo (OMG) Coin and Price Prediction for 2020)
History of Sia
The story of Sia begins in 2013 with the brilliant idea of decentralized storage, but the network went live in 2015. To this day, many crypto projects are still in development but Sia has already been running for about 5 years. From the idea came an ICO held in May 2014 for the sale of SiaNotes. About 1,250 SiaNotes were put up for sale on the NXT Asset Exchange out of a total 10,000 with the aim of raising $100,000. The other 8,835 SiaNotes were held by Nebulous Inc.
By the end of the ICO, Sia had raised about $120,000 and that kickstarted the development of the network. Thereafter, Nebulous received a further $1.65 million from VC firms Procyon Ventures, Fenbushi Capital, Raptor Group and angel investor Xiaolai Li. When the network went live in mid-2015, these Sianotes were exchanged with Siafunds on a ratio of 1:1, basically converting one to the other. (Do you ever wonder: Will Crypto Trading Become Popular in Islamic Countries?)
In mid-2017, co-founder and lead engineer David Vorick reported that the organization behind Sia, Nebulous, would create a subsidiary called Obelisk. Its function would be to produce ASICs explicitly for mining Sia. Network individuals pre-requested the ASICs and contributed a huge number of dollars to achieve the goal.
The problem, however, was that ASIC fabricating mammoths Bitmain and Innosilicon had likewise started to create Sia ASICs around the same time. This didn't agree with the Sia community and many of them requested a hard fork to prevent the network from being monopolized by Bitmain. A handful of companies have dominated and continue to dominate many popular coins like Bitcoin, which makes it very difficult for the network to become truly decentralized. Indeed, Innosilicon was already controlling 37.5% of Sia's mining hash rate and there was a lot of negativity against Bitmain. (From now on: Swiss Banks Start Offering Crypto Trading To Their Clients)
While many contradicted the hard fork, the main Sia developers, at last, chose to proceed with the hard fork. The hard fork was achieved on October 31, 2018, with the aim of bricking Innosilicon and Bitmain miners. Just Obelisk hardware would be permitted to run on the network, giving them ASIC mining monopoly. (To The Moon: Most Promising Asian Crypto Companies 2020)
While numerous in the network were content with the outcome, there were some disagreeing voices, particularly the individuals who had vigorously put resources into Innosilicon. They chose to keep utilizing the old Sia chain, calling it SiaClassic. Today, SiaClassic has very little support among the Sia community and the coin has very little value. As for the network itself, Vorick has reported that 87% of the mining hash rate comes from the general community and not from any single body.
In October 2019, Nebulous Inc. reached a settlement with the SEC for allegedly violating the law. The SEC claimed that Sianotes were considered securities, yet the company had failed to report the ICO. Nebulous stated that the SEC was not regulating crypto back then, which is true, but they still had to pay. Nebulous had to forfeit the $120,000 it had raised from the ICO and a further $100,000 in penalties. (Crypto Brokers: Evolution of Forex Brokers in 2020)
It was not the first company either to face legal action from the SEC since Block.one had held an ICO for EOS and was fined $24 million. Kik also faces a $100 million lawsuit from the SEC for launching the cryptocurrency Kin through an ICO. Thankfully, the settlement means that the Sia network still remains active. Several other companies that were in the SEC’s crosshairs were not so lucky. (Ethereum 2.0 Launch 2020: What’s new?)
What makes Sia and Siacoin better than other storage systems?
You may be wondering how Sia compares to the popular services we have today like Amazon, Google and Microsoft and why one should even consider the former. Well, there are a couple of reasons for this mainly based on the setbacks of centralized storage. (You should know about the: New Rules and Crypto Regulations in Germany As Of 2020)
When you upload a document to, say, Google, you probably don’t give much thought to it. After all, your main concern was to back up your data in case you lose it on your computer. But what could Google do with your information, and is it completely private? All companies that provide cloud storage will, of course, claim to ensure maximum privacy, but we have seen several examples of the exploitation of privacy.
The most famous case is that of Facebook where the company ‘sold’ users’ data to politicians to use during political campaigns. But these companies are even more sinister because they use a person’s data to create psychographic profiles. These profiles are then ‘sold’ to advertisers so that they can target their ads very specifically. Basically, a company with access to your private information could use it to understand your behaviour and interest. Such information is very useful to marketers because they can anticipate what you need and target you specifically with ads. How else do you think you’re able to get gigabytes of online storage for free? (You should be aware of the: 2020 BTC Halving Warning Update)
Unlike these systems, Sia uses blockchain technology which is completely decentralized and anonymous. An individual’s identity is never revealed to the hosts on the network, so they never know who the information belongs to. Furthermore, the data space you rent is from an individual just like you, and they have no incentive to sell your information. Their only interest is to get their payment in Siacoins at the end of the month. In this way, Sia is a much more private platform. (BTC SV Genesis Hard Fork 2020: What's New?)
Another advantage of blockchain is that it is not hackable. Sure, we have seen cases of crypto exchanges being hacked, but blockchain networks have never been hacked. It is because of their distributed nature that it becomes impossible to hack compared to a single server. With so many nodes on the Sia network, you can be assured that your data will never be hacked. Moreover, Sia also encrypts all data uploaded on the network as an additional layer of security. (Get ready as: BTC Cash Halves The Mining Reward 2020)
Did you know you can get 1TB of storage space on Sia and only pay $2 per month? $2! No other centralized platform offers that kind of price for storing that amount of data. And in case you were wondering, $2 is also much lower than the cost of any 1TB hard drive out there. That makes Sia perhaps the cheapest storage solution in the world.
The cost of hosting is higher in decentralized systems because all the servers, equipment, staff and other costs must be covered by the company. As you can imagine, it is expensive to keep all of these workings in tandem. It’s different in a decentralized system like Sia because these costs are distributed across the network. It is the reason why the monthly payments can be so low without compromising on the services. (Keep an eye on these: Top 5 Important Events In The Crypto World In 2020)
How it all works
Being a crypto network, you will find a lot of similarities between Sia and other coins like Bitcoin. However, this is a bit more complicated because it involves more than just storing transaction records on a ledger. An entire system has to be put in place to ensure files are stored securely and that other network operations continue to run as well. To this end, we can look at the Sia network from it’s 3 basic sections:
At the heart of Sia is a blockchain that looks very similar to that of Ethereum in that smart contracts are used within the platform. This is different from transactional crypto networks like Bitcoin which only handle direct transactions from one individual to another. It starts with the ledger where all transactions are recorded. This ledger is duplicated and hosted on numerous computer nodes around the world to create a distributed ledger system (DLT). (This is our: ICON Price Predictions and Forecast for 2020)
The computer nodes holding the ledger are also responsible for keeping the network active by ‘mining’ new coins. This is done by solving complex mathematical equations that require a lot of processing power. This kind of system is called proof of work (PoW) and can be observed in most DLTs. When a miner successfully solves the equation, the block is hashed and distributed to the other nodes. Hashing is similar to encrypting, and this ensures that the record cannot be modified again.
In reward, the miners receive a reward in the native token Siacoin (SC). The reward for the first mined block was 300,000 SC, and the reward decreases constantly until it reaches a flat reward of 30,000 SC per block. Rewards are a way of incentivizing miners to keep the network alive, but they are also the way new coins are created. (Calm Before the Storm: What to Expect from Crypto Industry in 2020-2021)
In addition to the above basic structure of DLTs, smart contracts are also included on the network. DLTs meant to host decentralized apps (dApps) like Ethereum use smart contracts for that purpose, but Sia uses them to create file contracts. You can learn more about these file contracts in the next sections, but basically they create an avenue for users of Sia to set up agreements. (Find out: How Coronavirus Will Blow Crypto Markets in 2020)
Siacoins (SC) and Siafunds (SF)
Siacoin (SC) is the native token used within the network to pay and get paid for receiving and providing storage services. Siafunds (SF) are meant more for investors in the company and Sia itself. There are 10,000 SF in total and these coins are not mined. Sia holds the majority of SF and a few were distributed to investors who participated in the 2014 ICO in the form of Sianotes. Those who hold SF get rewarded by receiving 3.9% of all transactions taking place on the Sia network. Imagine a transaction that involves 500 SC from the renter and 500 SC from the host stored in an escrow account. Once the deal is complete, 3.9% of 1,000 SC will be deducted and allocated to Siafunds where the coins will be distributed evenly.
As you can see, Siafunds are really meant to pay the initial investors who had faith in the company. In case you’re thinking about buying Siafunds, you will not find them on the regular crypto exchanges. We already saw that the SEC classified them as securities, and crypto exchanges normally avoid dealing with such assets to avoid regulatory attention. Nevertheless, some decentralized exchanges like Bisq offer SF. (WhatsApp, Telegram, Facebook: Who is Going To Be The Next Global Payments Leader?)
That being said, Siacoins are the most widely used coins on the Sia network as they facilitate all transactions. There is no limit to the number of SC, and miners will continue to create new SC forever. Unlike Siafunds, Siacoins can be found on many popular crypto exchanges and can be stored in many crypto wallets too. (Read more on our: iExec RLC Price Prediction and Forecast for 2020)
Sia P2P storage
There are two fundamental components that enable Sia's P2P storage - the renters and the hosts. The renters pay in Siacoin to rent storage space from the hosts. They are likewise allowed to decide the capacity charges directly from the hosts. Since the hosts assume such an imperative job in the system, they have the opportunity to promote how much space they can provide and the quality of their service, for example, bandwidth. In addition, they also reserve the privilege to deny storage space to a specific customer for any reason. For instance, a host may feel that the information is excessively delicate, ethnically unsuitable, or unlawful. (Everyone’s wondering: Will Africa Be The Next Frontier For coin?)
The renters too have several rights to the data they upload for storage. Some of these rights include security and special treatment. In order to secure the files, the data is split into fragments and duplicated between different hosts. Each fragment is encrypted and can only be decrypted using the renter’s special key. This will help guarantee the security of the document because no single host has the complete file. Besides, even if one host was to be hacked, the hacker would still not get the whole file. And even in the event that a host lost one fragment, there would still be copies on other hosts so the data is never lost for whatever reason.
As a renter, you also have the freedom to pay the hosts more than the requested charges so as to guarantee special treatment. Some of the perks to this special treatment may include quicker transfer speeds and giving demands on the storage space. This allows individuals with specific needs to still receive the level of service they need on the network. (Read about the: UNUS SED LEO Price Prediction 2020)
Now that you know what the renters and hosts are allowed to do, it’s time to understand how the two can come to an agreement. At the centre of Sia's usefulness, lies File Contracts, which are Sia's form of smart contracts. These agreements permit renters and hosts to connect legitimately with one another, inside the bounds of some pre-decided and all around characterized set of rules. Every smart contract utilizes the IF-THEN rationale, which means that an action will only be executed if the action preceding it was executed to its fruition. (Do you know: What is Huobi Coin and its Price Prediction for 2020?)
It begins with the renter who will set up an allowance. Simply put, it is a prepaid measure of Siacoins that will cover storage and data transmission requests during the length of the agreement. The default length of the agreement is 13 weeks. This remittance will at that point get bolted up inside the wallet, sort of like an escrow account, and the Sia software will immediately get 50 ideal hosts for the tenant as indicated by their scoring.
The host secures up some Siacoins guarantee as a motion of sincere trust. The size of the insurance is set up by the host physically. A higher guarantee guarantees a higher scoring during the host's determination procedure. When complete the document contract is marked by the tenant and the 50 hosts before being submitted to the blockchain. As mentioned before, 3.9% of the total money secured up in the agreement is paid as expenses to the holders of Siafunds.
For whatever length of time that money sits in the escrow account, renters can upload and download their records as many times as they need. The present agreements won't be influenced if the host chooses to change their rent price mid-activity. Data transfers are done by a direct association between the renters and the hosts. For additional security, the data is encrypted by the Twofish algorithm and saved by the redundancy algorithm Reed-Solomon among the hosts.
To shield the renters from bad hosts, Sia requires proof of storage. To get their payment, the host must present evidence to the system that they are online and that the data is stored properly. This is done within certain pre-decided time allotments, during which the host provides evidence to the network. In the event that the host neglects to give this verification inside a given time span, their payment is sent to a missed evidence address until a confirmation is submitted.
The hosts also get punished on the off chance that they are careless and the agreement may get ended totally in the event that they miss such a large number of time allotments. Then again, in the event that the host effectively gives proof of storage, the system allocates the payment to the actual address.
After the storage period has ended, the renter can either choose to renew their contract or terminate it. If the renter decides to renew the contract, the allowance they put up at the start will stay in the wallet and they will continue to pay the normal fee required. The collateral put up by the host will also remain in place throughout the hosting period. On the other hand, if the contract is ended successfully, the host will be paid in full and receive the collateral they put up in the beginning. The renter will get back whatever is left of their allowance and pay the necessary fees. If a host does not keep their end of the deal, say, they did not achieve the uptime required by the renter, then they will lose all the collateral they put up.
How good is Sia as an investment?
Sia promises to be disruptive in the way people store information, and so far it has indeed proven to be very effective. There are already huge amounts of data stored in various hard drives around the world through the Sia network. But some of you are not really interested in the network but how you can take advantage of it. For that, you might want to look at how the value of Siacoin and Siafunds has been and whether it might be a good investment.
Siacoin price performance
On CoinMarketCap, SC is ranked as the 65th largest coin by market capitalization. This makes it the largest distributed cloud storage platform ahead of others like Storj and Filecoin. For the most part, the coin’s historical price chart is similar to many other coins as you can see below. That is because SC is heavily influenced by the general crypto market trends. At the start, a single SC coin went for around $0.000048 and today the same coin is worth $0.0013. It means that, to date, SC has appreciated by over 2,600%. This is not unusual in the crypto market, but it certainly is remarkable when compared to other financial assets.
As for Siafunds, they were first introduced through an ICO in 2014. Investors who received Sianotes, later on, switched them with Siafunds on a 1:1 ratio. These coins are not found on any major crypto exchanges, but some decentralized and P2P exchanges do offer them from time to time. For example, a sale was held in 2018 where each token was being sold for $7,500 on Reddit. The real value of Siafunds lies in the 3.9% rewards investors get from every transaction. Of course, these rewards are shared among all investors, but they can add up especially when the value of SC rises.
How will the value of SC and SF change in 2020?
The year so far has been very tumultuous with the Covid-19 epidemic spreading globally, but there was a boost to the markets yesterday on march 24, 2020 after the Fed all but promised a $2 trillion stimulus package. The announcement gave hope to the markets causing a huge boost in stock markets across all 11 sectors. Cryptocurrencies are yet to react to the announcement, but we have already seen that coins tend to lag behind major economic markets.
But it is wonderful news to hear that there will be some economic reprieve following the panic that saw markets crashing in the past few weeks. What has become evident is that investors see coins not as a safe haven but more as risky assets. That is why the value of coins has been decreasing in the past month as investors look for safer alternatives like bonds and gold. With the stimulus package on the way, though, we may see the price of coins recover in 2020 and end the year higher than it began. For Siacoin, most experts predict that the price at the end of 2020 will be between $0.02 and $0.03. We believe that this is a reasonable prediction and that you should not expect 2017-2018 numbers.
Siafunds is also worth considering, even though it is difficult to get through. What we do know is that there is a huge demand for cloud computing services. So far, Sia has proved to be the cheapest option there is and it is no wonder that many people are already using the network. There was even talk that Netflix was considering moving their files to the Sia network. However, this is going to take months or even years to achieve. Regardless, it shows how much faith there is in Sia that a major company was considering the move. What it also means is that investors holding on to Siafunds may experience a surge in rewards should Netflix or any other company partner with Sia. As said, this is still a long way away, so it is meant more for the long-term investor.
If you want a brief summary of all you have learned about Siacoin, here is a short video to help: