Blockchain Technology – The Future of Storage?

The Current State of the Cloud

Today’s cloud solutions are incredibly useful for both individual and enterprise use cases. Options like AWS or Microsoft Azure have become an indispensable tool for hobbyists and businesses alike, offering a great deal of flexibility with regards to storage and computing.

The utility of the cloud, however, is largely undermined by its architecture – the servers storing data are, after all, centralised. The fact that a single business controls these raises certain privacy and security concerns, particularly at a time where data breaches have been rampant. Even titans like Tesla have opened themselves up to compromise in this manner.

This reliance on a third party to keep data safe is perhaps one of the biggest downsides to cloud storage. It’s risky to aggregate sensitive information into a central point of failure, but, to date, it seems the pros have outweighed the cons – there’s the cost-efficiency consideration, as well as the ease of sharing files with people around the world (handing a coworker a flash drive directly simply isn’t feasible when the workforce is spread across multiple locations). To usher in a superior alternative, one would need to devise a system that is cheap, scalable and more secure.

Exploring Blockchain Technology’s Potential

I’ll defuse a common misconception straight away – blockchain tech is not the magical, multi-purpose infrastructure (as most of its hype would have one believe). As far as scalability and speed go, it’s actually terrible. Remember that a distributed ledger requires that hundreds, if not thousands, of nodes store a copy themselves. It needs to be slow to allow nodes to download data, and can’t store large amounts of this without requiring nodes to pay significant storage costs (which would have a knock-on effect of hurting decentralisation, as less will participate).

Similarly, there’s another dangerous misconception about privacy. With blockchains, which are upheld by the idea that anyone can view the ledger, there is no privacy. If one did, for whatever reason, decide to upload sensitive data onto the network, it would be observable by anyone, forever.

Blockchains are excellent at one thing, however – immutability. Once a block is appended to the chain, it’s extremely difficult to remove or edit the entry (most would say it’s technically impossible). The decentralised nature of a distributed ledger further means that two strangers can transact or exchange information in a trustless manner, as their interactions are governed by code and not by oversight of a third party. We saw this with Bitcoin as currency (and a few other limited use cases), but second-generation networks like Ethereum open up a wealth of other interesting applications with Turing-complete smart contracts.

Blockchain Technology and Distributed Storage

Smart contracts were conceptualised by Nick Szabo in the 90s, but have only recently become a reality, allowing for code agreed upon by parties to execute without a middleman’s interference. Blockchains are an ideal medium on which these are able to thrive, and I think they are set to play a crucial role in granting, revoking or otherwise altering permissions over data caches.

For the reasons elucidated above, storage directly on-chain is impractical (not to mention expensive). The Ethereum blockchain, for instance, can only handle up to 15 transactions per second, by virtue of its Proof-of-Work mining mechanism. It’s worth considering alternative options that would allow for blocks to be processed faster, and thus, boost the throughput of the network whilst enhancing its scalability.

Ethereum has proven to be useful for storing and executing smart contracts, and transactions in ether. Recording even the simplest of text files incurs extortionate costs. I think the solution lies not in using a blockchain as a standalone tool, but as complementary to off-chain distributed storage mediums like IPFS. In one hand, you have powerful and unalterable record of which addresses have interacted with a specified smart contract, and in the other, efficient and encrypted storage.

An individual (or business, for that matter) could easily draw up a smart contract comprising of an address that points to given content held off-chain. The content is encrypted, of course, and is not available for download unless the  the person wishing to access it would either need to pay a set amount of tokens (an idea which opens up a lot of potential for content management without going through third parties), or they have been given explicit permission to access the content by the owner. With this system, all actions are tracked and traced on the immutable record of the blockchain of when and whom has been given access to content, and at the same time users are able to enjoy the flexibility of distributed  storage, without the risks of centralisation.

Moving Forward

We’re starting to see a lot of these projects mature, and that can only be a good thing: for all its advantages, cloud storage poses some major risks to the privacy and security of its users. The idea of a single party being in control of an abundance of sensitive data is one that needs to be deprecated, and few technologies match blockchain in their potential to make this a possibility.

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