You know I love use cases in crypto.
File storage cryptos
This is going to be big.
I've done the research,
let's look at five
storage cryptocurrencies with
massive potential that you can invest in.
First on the list is Filecoin.
Filecoin is a decentralized
storage network that was created
in 2014 by Protocol Labs.
Filecoin is by far the largest
on this list with a market cap
of $7.5 billion dollars.
which is exactly why
I'm starting out with this one.
As of now, Filecoin is
is kind of the Bitcoin of
storage cryptos.
It's the biggest dog.
It's the household name.
On top of Filecoin,
Protocol Labs has seven other projects
that all have the same mission as Filecoin:
Building a foundation for Web 3.0
So Filecoin is a decentralized
storage network.
This is where a network of nodes,
which is simply computers running
blockchain software
provides storage space
in order to decentralize
and secure users files.
So how does it work?
Well, there are different types of
decentralized storage networks
Filecoin uses a system called
IPFS that was developed by
their parent company, Protocol Labs.
And if you want to know what
IPFS stands for
It stands for Interplanetary file system.
And if you heard that and you thought to yourself,
Interplanetary?
Yes, Interplanetary.
We're living in the future.
In IPFS file storage system,
due to it being permanent and distributed
it could hypothetically be
be shared across planets.
No one tell Elon Musk
So not to be geeky here, but this is because
it wouldn't ever have to
reference a central server.
Well, our current protocol, HTTP does.
So the Filecoin blockchain is
actually just a layer built
on the IPFS system.
It doesn't do any file storing itself.
It's just a ledger for transactions
of the Filecoin
which is used as a store of value
so users can pay fees
that create incentives
for node operators.
So here's how the system works.
If you were looking to store files
on this network,
you would upload your files.
Those files would then be broken off
into many pieces and store with nodes
providing their storage space.
When you want to retrieve these files,
the network determines the
closest node to retrieve that data for you.
Now, if you are a node operator
looking to make some sweet cash
from providing storage space,
you would stake your Filecoin
for the opportunity to provide storage.
This would allow you to
dedicate a certain amount of storage.
and network then fills that storage
with pieces of user data,
and fees are paid by the users
using that storage space
that would then go straight into your pocket.
And if a node ever decides to delete
or tamper with a user's data
the data is compared to other holders of that data.
Remember, it's all decentralized.
And if it doesn't match
up the bad actor's staked Filecoins
are then slashed.
I could have used this last week.
There was a power surge here in Puerto Rico
and it completely
fried my computer.
I lost 500 GB of data,
including two finished videos,
:'(
500 GB of data
including two finished videos
Anyways, what sets Filecoin apart?
To me, it's the name recognition
and the team of 120 people behind it.
So not only is it a top dog
with a $7.5 billion market cap,
but it uses that IPFS system,
which is the most well known protocol
for this type of file storage.
Next on the list is BitTorrent.
Now this name might bring back some memories
for you internet pirates out there.
BitTorrent was founded in 2004
as a peer to peer file sharing platform.
2004
crypto was just a twinkle in Satoshi's eye
at that point in time.
This peer to peer file sharing system
allowed users to share files
with each other without the need
for a centralized server
to be the middleman.
And I know this sounds like blockchain technology,
but it wasn't exactly that.
A little less decentralization and no ledger,
but they were still ahead of their time.
Anyways, BitTorrent was super popular for years
but struggled to monetize their platform
more and more over time
before being acquired by the
Tron Foundation in 2019
That's the same Tron Foundation
that built the Tron Blockchain.
They then added the BTT Token,
which is basically an incentive layer
for file hosts that would hopefully fix
some of the issues BitTorrent was running into
making the project self-sustaining.
Speaking of self-sustaining,
check out that link in the description for BlockFi,
where you can receive up to $250 in Bitcoin
when you make an account.
Now, the key difference between
a file storage system like Filecoin
and BitTorrent is
well, Filecoin is offering a way to
store any files.
BitTorrent is a platform for users
to offer specific files
to other users.
This could be movies, songs,
or that one episode of SpongeBob
where everything was Chrome for some reason.
Now how does this work?
How does BitTorrent work?
It starts by connecting the provider
of a file to a user
who is requesting it.
Then a bid is agreed upon by
both parties, and the Tron Blockchain
facilitates payments of the
BTT token from the user to the provider.
And boom, that's it rinse and repeat.
Now what sets it apart?
To me, BitTorrent is very different
from other storage related cryptos.
They have their own niche
and use cases in sending specific
data between users.
Third on the list is Siacoin.
Siacoin, just like Filecoin,
is a decentralized storage network.
Its conception was technically
before Filecoin, yet Siacoin
lost its crown to Filecoin for two major reasons.
First, Filecoin was able to raise
way more money than Siacoin.
Siacoin raised $3 million
while Filecoin raised $200 million.
Talk about a serious headstart
And second, Filecoin just has
a better name.
I mean, how clean is Filecoin
for a file storage blockchain?
Now how does it work?
Besides some technical differences between
Siacoin and Filecoin,
they basically work the same.
Node operators can stake coins
in order to lend out storage space,
and then users can pay to use that space
to securely store their
files in a decentralized manner.
Now I know what you might be thinking.
Like, Max, Why say the same thing?
Why even include Siacoin
if it's a smaller version of Filecoin?
While there is a difference
and that's what they're being used for.
Filecoin is looking to be the backbone of
Web 3.0 with their decentralized
file storage network,
while Siacoin is looking to give access to secure
cloud storage, that's much cheaper than
Google Drive
and it is much cheaper than Google Drive.
Siacoin charges $1 to $2
per terabyte per month
while Google Drive charges $10.
So 10x
So Siacoin is focusing on the consumer side
and not trying to store literally everything.
Let's put it this way.
While Filecoin is trying to get entire websites to host
from their protocol, Siacoin is telling
your grandma that she can upload her
favorite photos to the cloud
if she knows what a cloud is,
she's probably checking the weather app
if it's my grandma
Sorry grandma.
And while Filecoin storage nodes
are the size of rooms,
Siacoin has nodes hosted on 2012 laptops
by people looking to make an extra buck.
So Filecoin and Siacoin are
are doing the same thing but
have totally different target demographics.
This is definitely one to keep an eye on.
Fourth on this list is Arweave.
Founded in 2017, Arweave
provides decentralized file storage
of any type and can even host apps and sites
Arweave differentiates itself
by storing its data permanently
and uses some clever math to do so.
Arweave uses our history of improvement
with file storage to predict
the cost of storage over the next 200 years.
It then uses that number to calculate
how much to charge per gigabyte
stored on the network
again over 200 years.
Arweave also isn't technically a blockchain
instead of the typical
hash storage system that creates
a chain-like connection between blocks.
Arweave connects each block
to two earlier blocks,
creating a kind of woven structure
hence the name Arweave.
Now what sets it apart?
The biggest differentiator is the prices.
Like I said, Arweave charges
based on the expected cost
of storing data for 200 years,
and it costs a whopping $15
per gigabyte of data stored.
And this isn't necessarily a bad thing.
Like I said, that's what sets it apart.
And it's their belief that by
offering permanence,
this will help promote higher quality
applications and projects
with good upkeep.
Now, number five on this list
This is Ankr.
Ankr was founded in 2017
by Chandler Song.
and it's doing a little bit more than
decentralized storage,
so it's a little bit unfair
to include this on this list,
but I'm including it anyway
because it's very interesting and also because
all the other file storage
cryptos that I had in mind
were very similar to Filecoin and Siacoin
So let's spice this up a little bit.
So the Ankr network doesn't just host any data.
Anchor stores and hosts nodes for other blockchains.
They do this in a really unique way.
They reuse old and outdated PC hardware.
They run them in bulk,
and then they allocate hardware to
certain nodes based on what is needed for that node.
Now what sets it apart?
I believe that Anchor is one of the few projects that is
really forward thinking in this model.
The idea of using outdated computer hardware
that has been neglected and even ignored
by most people is crucial for
long term efficiency
and we have to applaud them for that
and it also lowers the barrier to entry
for creating blockchains.
Since anchor can host nodes
for literally anything.
Now let's talk about the benefits of
blockchain cloud storage,
Just in general.
The first big one is unhackability.
With traditional centralized cloud storage,
If the provider of that storage gets hacked,
all of your data is compromised
along with everyone else using that provider.
And this does happen from time to time.
With decentralized cloud storage,
this is basically a non issue
since users data is encrypted and decentralized.
If one or two nodes are compromised,
the data inside
does nothing.
The hacker can't do anything with it.
Think that someone came along and
stole one thread from your T-shirt.
You're just fine.
It's also way cheaper using blockchain storage.
Like I said earlier, it's 1/10th
the price of Google Drive,
and it prevents file loss
with Filecoin and Siacoin
since multiple copies of each
shard of data are stored
in the network.
If something were to happen to one node,
the network can replace that chunk that's lost
meaning your data is virtually untouchable.
So file storage is one of those perfect
use cases for blockchain tech
and it really just gets me jazzed up for the future.
I'd like to thank you for watching
and I hope you have a profitable day.