Siacoin Decentralized cloud data storage

Sia is a decentralized, peer-to-peer, cloud data storage platform built on blockchain technology.

Background

Sia is a platform for decentralized cloud data storage, getting built by a team at Boston-based Nebulous Inc., founded in 2014. Sia connects people “hosts” that have underutilized hard drive capacity with customers “renters” in search of data storage. The aim is to provide a platform that allows for peer-hosted storage of files, without the need for a single centralized entity to control the data. Sia itself would store only the storage contracts formed between the parties.

In the platform, files of individual users will be broken up and spread across a number of storage providers, known as hosts. These hosts will need to provide proof of file storage on a regular basis in order to receive payment and not be penalized. Payment is in the form of Siacoin and penalties involve the host losing Siacoin collateral that was put up. The proofs provided by hosts are available on the Sia blockchain for verification by miners, who also receive payment in the form of Siacoin for their verification work.

Instead of pre-mining a certain amount of Siacoin, Nebulous intends to generate revenue from fees on all contracts. This is done through the existence of so-called siafunds. When a contract is created, 3.9% of the contract fund is removed and distributed to the holders of siafunds. Nebulous Inc started off holding 88%, with the remainder held by early crowd-fund backers of Sia.. Siafunds can be transferred to other addresses but not used as payments on the platform.

Technology

Sia is being built as a derivative of Bitcoin, with the additional required support for the creation and enforcement of contracts. These contracts contain a number of items of information including a hash, duration of the contract, frequency of challenges and payment parameters including the reward for a valid proof and for an invalid or missing proof. If a valid proof is provided during the required window an automatic payment goes to the host. If the proof is missing or invalid the coins are sent to a “missed proof” address, likely an unspendable address.

Hosts will be able to advertise themselves in different ways, e.g. as highly reliable, requiring a higher price and with higher penalties for losing files, or as less reliable, with lower prices but with lower penalties for losing files. The intention is for this to result in an optimized, efficient market place.

The Sia software divides files into 30 segments before uploading, each targeted for distribution to hosts across the world. This distribution assures that no one host represents a single point of failure and reinforces overall network uptime and redundancy. File segments are created using a technology called Reed-Solomon erasure coding, commonly used in CDs and DVDs. Erasure coding allows Sia to divide files in a redundant manner, where any 10 of 30 segments can fully recover a user's files. Sia is more secure than existing solutions because hosts only store encrypted file segments, rather than whole files. Sia uses the Threefish algorithm, an open-source, secure, high-performance encryption standard.