Guest Contributor – Exponential Investor (United Kingdom) –
There’s a hit HBO comedy show called Silicon Valley.
The running joke is the optimism, buzzwords and self-importance of the people who work in tech.
In one scene at a conference, there’s a montage of different companies “making the world a better place through [random series of tech buzzwords].”
It’s a parody, and an exaggeration. The ideas the characters come up with are often impossible in real life. It’s not meant to be too realistic.
Only this season it was.
The breakthrough idea of the season was the creation of a decentralised internet. Or more accurately, decentralised storage.
You can watch the main character’s “ah ha” moment here (warning, extremely offensive language). Shortly after the episode aired, decentralised storage gained a lot of attention.
This farfetched fictional idea is, in fact, already reality, thanks to blockchain technology. And as you’ll see today, it really could “make the world a better place”… and potentially make investors a lot of money.
The future of storage is decentralised
So what does “decentralised storage” actually mean? Essentially, no one entity has full access to your files, except for you.
Your files are encrypted, broken up, and then distributed around other computers on a blockchain network. Only you have the private key that can reassemble your files.
The different file fragments are copied multiple times and spread across many different computers. So even if some of the computers that store your files leave the network, you’ll still have access to all your files.
There’s a simple video explanation of how it works from Storj – one of the main players in this space – here.
The big benefits of decentralised storage are:
Price – it is much cheaper than current cloud storage. And if you have some spare space on your hard drive, you can even “rent it out” and receive a payment in return.
Privacy – no one on the network knows what your files contain except for you. And no one knows whose files are stored on whose computer.
Security – if one or more of the computers your files are stored on gets hacked, it doesn’t matter. They each only have an encrypted fragment of your file. Even if someone could somehow hack enough of the network to get your full file, it would still be encrypted and inaccessible.
And just as an aside, this encryption is the same as what allows cryptocurrencies to work. If it could be hacked, all cryptocurrencies would become worthless. So it’s extremely secure.
Speed – unlike a traditional network, the more computers that are connected to the blockchain, the faster it will run. Decentralised storage has the potential to run at incredibly fast speeds.
Control – we’ve somehow become okay with the idea of companies holding, accessing and selling our private data. But if you stop to think about it, that’s a crazy idea. The reason we do it at the moment is because any alternative is slow and cumbersome.
Blockchain storage will be cheap, easy, fast and secure. It’ll be the first viable alternative to trusting the big tech firms.
The big names in blockchain storage
The blockchain (crypto) that has been grabbing all the storage lines since the Silicon Valley episode aired is Storj.
It’s the one that produced the video I linked to earlier. Its service is already available to use. If you want to try it out for yourself visit Storj’s website.
If you want to know more about this crypto, of if you’re interested in investing, you can read its whitepaper here.
Storj’s current market cap is $66.4 million, up from around $20 million when it launched in mid-July but down from its all-time high this August.
Storj market cap
Its ticker symbol is STORJ and you can trade its tokens on most of the big exchanges like Bittrex and Poloniex.
(Remember, this is a cryptocurrency, not a security. So you can only invest through cryptocurrency exchanges. It’s very different to traditional stockmarket investing.)
Another big name is Sia.
If you were just to watch its promotional video, it would be hard to tell it apart from Storj. But, there is a fairly big difference when it comes to just how decentralised they are.
Here’s how one of Sia’s developers describes the difference:
I think the biggest difference is the approach to decentralization. Sia is fully trustless, which can only be achieved by downloading and verifying the entire blockchain. This can take a while and consumes a moderate amount of disk space (currently between 4 and 6 GB). It means the node consumes more ram, a bit more cpu, and getting started takes a lot longer.
But, during the whole process, you never trust anyone, you have no reliance on our servers (or any other central party), and if we shutdown tomorrow Sia would keep running just as it always had.
Storj on the other hand is very dependent on central entities called ‘Bridge nodes’, and if Storj shut down tomorrow no host would ever be paid again.
Sia has also been around a lot longer than Storj. It launched in late August 2015. If you want to try out Sia’s storage for yourself, visit its website.
And if you’re interested in knowing more, you can read Sia’s whitepaper here.
Sia’s current market cap is $169.3 million, which is way down from its all-time high of $564.7 million set this June.
Sia market cap
Sia’s ticker symbol is SC and, again, you can trade its tokens on most of the big exchanges.
Then there’s MaidSafe.
MaidSafe aims to be much more than just storage. It wants to create an entire decentralised internet. It has a browser, email client and webhosting services.
Again, a good way to get an idea of its aims is with its promotional video. This one is a bit longer than the last two, but it has a lot of good information on it.
And if you want to take a deeper dive, you can read MaidSafe’s whitepaper here.
MaidSafe has been around even longer than Sia. It launched its tokens back in May 2014. Its current market cap is around $206.4 million. And as you can see from the chart below, just like most cryptos, it’s highly volatile.
MaidSafe market cap
MaidSafe’s ticker is MAID, and you can trade it on all the big exchanges.
A word about investing in cryptos
If I were to write about all the ins and outs of these three cryptos, it would span tens of thousands of words. So my advice is, if you like the sound of any of these projects, do your own research. Read the whitepapers, and research the communities surrounding them.
Many cryptos have their own communities on Reddit. These are great places to get information on them, and often the team behind the project will weigh in on discussions and provide information.
But remember, it’s in the community’s interest to hype their coin. They are all invested in its success. So take any claims of guaranteed money or millionaire-making with a grain of salt.
As with any crypto investment, these coins are highly volatile, unproven, and a very risky play. Of course, they also come with the possibility of a big reward.
At the moment we’re in such an early stage of the crypto ecosystem it’s impossible to know which ones will flourish and which will go bankrupt.
People compare the crypto boom today to the internet mania of the late 1990s. And it will probably have a similar trajectory.
As Frank Holmes, CEO and chief investment officer for Global Investors said in Business Insider this September:
Blockchain has the potential to be as disruptive as Amazon was in the late 1990s. When the company went public in 1997, there were serious doubts whether people would willingly give up their credit card information just to buy a book. Since then, Amazon stock is up 8,000 percent.
Some of these companies will change the world. Some will fall by the wayside. Some will make people millionaires. And some will leave investors bankrupt.
The key thing is to do thorough research and never invest more many than you’re comfortable losing.
Or, you could get advice form an expert you trust. As you can see above, it takes a whole lot of work to find good cryptocurrency investments.
And even if they seem good and have everything going for them, they are still going to be subject to huge price swings. One look at the charts above will tell you that.
Having an expert on your side is pretty much essential unless you have hours and hours to dedicate to research every week.
Our in-house crypto expert is Sam Volkering. He’s been involved in cryptos since 2011, and he knows more about investing in them than anyone I’ve ever met.
Next week Sam is going to share a way ordinary investors could generate lasting wealth from the rise of decentralised networks. He calls it “The Blockchain Collision” and, according to Sam, you could see nothing less than the largest returns in the history of the financial markets.
When you look back at all the industries the internet destroyed and then remade, you can get an idea of how much impact blockchains are going to have.
We’re living through a period of great technological change. Blockchains really do have the potential to change the world. As you’ll see next week, decentralised storage is just the beginning.
Until next time,
- 5 fundamental rules of crypto
- CRYPTO BOOK: Why cryptocurrencies will replace the existing financial system
- 7 Reasons why cryptocurrencies are the future