What is blockchain storage? (2024)

John Moore,Industry Editor

What is blockchain storage?

Blockchain storage is a way of saving data in a decentralized network, which utilizes the unused hard disk space of users across the world to store files. The decentralizedinfrastructureis an alternative tocentralizedcloud storageand can solve many problems found in a centralized system.

How blockchain storage works

Blockchainrelies on distributed ledger technology (DLT). The DLT acts as a decentralized database of information about transactions between various parties. Operations fill the DLT in chronological order and are stored in the ledger as a series of blocks. An interconnected chain is formed between blocks with each one referring to the block before it, thus creating a blockchain.

In blockchain storage, files are first broken apart in a process calledsharding. Each shard is copied toprevent loss of datashould an error occur during transmission. The files are alsoencryptedwith a private key that makes it impossible for it to be viewed by othernodesin the network. The replicated shards are distributed among decentralized nodes all over the world. The interactions are recorded in the blockchain ledger, allowing the system to confirm and synchronize the transactions across the nodes in the blockchain. Blockchain storage is designed to save these interactions forever and the data can never be changed.

Blockchain storage vs. cloud storage

Blockchain storage is a potentially cheaper, more secure andmore reliable alternative to centralized cloud storage.

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By taking advantage of the empty space on users' devices across the world, blockchain storage can cut up to 90% of the cost of centralized cloud storage, proponents claim.Individuals and businesses can profitby renting out the unused space on their hard disks for others to use.

Advantages of blockchain storage

In addition to the advantages explained above, having data stored across dozens of individual nodes also givesblockchain storage security benefits. Encrypting the files and distributing them across the decentralized network makes it harder forhackersto access the data. There is no central entity controlling access to files or possessing the keys needed to decrypt the files. The private keys are controlled entirely by the user, making it theoretically impossible for athird partyto access the files. Sharding also promotes security and privacy.

Blockchain storage could also allow faster and more customizable storage systems becauseusers are able to manipulate settings, such as the speed of retrieval and redundancy.

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Current blockchain storage projects

BitTorrent, Filecoin, Sia and Storj are among the decentralized storage networks using blockchain.

BitTorrent's decentralized storage network is based on its file-sharing protocol (BTFS) and Tron's decentralized blockchain platform. The network lets storage "renters" pay "hosts" for their excess capacity.

The Filecoin distributed cloud storage network uses blockchain and the InterPlanetary File System (IPFS) to let users purchase storage from providers on the network. IPFS is a peer-to-peer (P2P) hypermedia distribution system designed to provide a decentralized method for storing and sharing files. Nodes within the IPFS network form a distributed file system that can be accessed in many ways, including the Linux-based FUSE interface andHTTP (Hypertext Transfer Protocol). Local files can be added to the IPFS network and made available to the world.

Sia is a decentralized storage marketplace built on open source software developed by the SIA Foundation. The platform lets renters enter contracts with hosts that offer their excess storage.

Storj, based on the Ethereum blockchain platform, aims to provide private, secure and efficient P2P-based cloud storage. The Storj platform uses sharding and end-to-end encryption (E2EE) to store and protect data.

BitTorrent, Filecoin, Sia and Storj provide their owncryptocurrencies(BTT, Siacoin, STORJ token and FIL) in an attempt to create a market for buying and selling decentralized storage and encouraging its use. Themajor obstacle that organizations launching blockchain storage projects will faceis scalability.

This was last updated in September 2023

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FAQs

What is blockchain data storage? ›

In a blockchain, data is stored in a decentralized manner across a network of computers or nodes where blocks are chained together. Each block stores transactions, and when a block is full, a new block is created and linked to the previous one, forming a chain.

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What is the blockchain answer? ›

Blockchain technology is an advanced database mechanism that allows transparent information sharing within a business network. A blockchain database stores data in blocks that are linked together in a chain.

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What is the storage limit of blockchain? ›

As a result, the Bitcoin blockchain is currently only able to store around four transactions per second. While some have hidden secret messages on Bitcoin, it's not the place for serious data storage. As of December 2022 the Bitcoin blockchain has 440 GB of data stored on it.

What is blockchain in simple words? ›

A blockchain is “a distributed database that maintains a continuously growing list of ordered records, called blocks.” These blocks “are linked using cryptography. Each block contains a cryptographic hash of the previous block, a timestamp, and transaction data.

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What is an example of a blockchain? ›

Bitcoin- Bitcoin is a decentralized digital currency, often referred to as a cryptocurrency. It exists on a decentralized network of computers, often called a blockchain, that keeps track of all transactions made using the currency.

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What is blockchain space? ›

Block Chain Space is a focused startup accelerator for talented visionaries creating disruptive solutions to real-world problems using blockchain technology. Blockchains are tamper-proof, immutable, time-stamped, transparent ledgers whose applications have the potential to improve many aspects of our lives.

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How do you explain blockchain to dummies? ›

'Blockchain' is a compound word– here the 'blocks' are the records of data, and the 'chains' are the links each record has with each other. It's a democratizing technology, in that it makes everyone equally accountable and equally in control (at least in the case of public blockchains– but more on that later).

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What is blockchain in 10 words? ›

It's a type of distributed ledger technology (DLT), a digital record-keeping system for recording transactions and related data in multiple places at the same time. Each computer in a blockchain network maintains a copy of the ledger where transactions are recorded to prevent a single point of failure.

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What Cannot be stored in blockchain? ›

Things that can't be/should not be stored on the blockchain: personal/sensitive information (blockchains are public) very large files (use alternatives such as IPFS) dynamic data (it would be expensive and redundant to.

Can blockchain replace cloud storage? ›

While blockchain offers unique capabilities, it is unlikely to replace traditional cloud computing entirely. Instead, these technologies are likely to coexist, with each serving specific use cases and complementing the other's strengths.

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What is my blockchain limit? ›

What are the limits for swapping, depositing, and withdrawing crypto or fiat? All verified Blockchain.com users can exchange unlimited amounts of cryptocurrency or fiat currency (e.g. USD) within their wallets.

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Where is blockchain used in real life? ›

Blockchain in Money Transfer

Blockchain is especially popular in finance for the money and time it can save financial companies of all sizes. By eliminating bureaucratic red tape, making ledger systems real-time and reducing third-party fees, blockchain can save the largest banks lots of money.

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What the heck is blockchain? ›

What Is a Blockchain? A blockchain is a distributed database or ledger shared among a computer network's nodes. They are best known for their crucial role in cryptocurrency systems for maintaining a secure and decentralized record of transactions, but they are not limited to cryptocurrency uses.

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What is the purpose of the blockchain? ›

A blockchain is a decentralized ledger of all transactions across a peer-to-peer network. Using this technology, participants can confirm transactions without a need for a central clearing authority.

What is the difference between cloud storage and blockchain storage? ›

The Difference

For blockchain, data is immutable, meaning it cannot be deleted or modified. For cloud computing, the data is mutable, which is the opposite and able to be changed. Blockchain is an advanced technology that keeps record of digital assets, but does not necessarily provide any services.

What is an example of a Blockchain database? ›

There are several types of blockchain databases, including: Public blockchains. Public blockchains are open to anyone and are not controlled by a central authority. Examples of public blockchains include Bitcoin and Ethereum.

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How does blockchain data work? ›

It's a type of distributed ledger technology (DLT), a digital record-keeping system for recording transactions and related data in multiple places at the same time. Each computer in a blockchain network maintains a copy of the ledger where transactions are recorded to prevent a single point of failure.