The Center Cannot Hold: Why Blockchain Will Lead to a Decentralized Data Storage Revolution
While blockchain is best known as the main factor for the rise of cryptocurrency, its applications go far beyond Bitcoin. Experts say that blockchain is only starting to realize its full potential, and markets other than the financial sector will gradually be disrupted by this technology.
However, blockchain might be straining the world’s existing storage systems. The amount of transactions processed on Ethereum on January 4, for example, reached almost 1.35 million, and the blockchain processes an average of 15 transactions per second. While this number pales in comparison to the 45,000 transaction-per-second capacity of the Visa network, the demand for Bitcoin and other cryptocurrencies will drive up the demand for storage as well.
One issue that commonly comes up whenever blockchain is discussed is scalability. Ethereum is a bit more complex when it comes to scaling as there is a need to accurately record ownership of Bitcoin along with a ledger of all transactions that balances up to the present. Unfortunately, blockchain itself is not built for storing massive amounts of data, and this intrinsic limitation might work against miners and investors alike.
Enter decentralized storage. This sort of storage works similarly to blockchain in that it distributes data across a network of servers. Unlike blockchain, though, decentralized storage partitions entire databases that are accessible using a partition key – a method known as “sharding.” A complementary method, known as “swarming,” uses a network of nodes to manage the data.
Swarming and sharding, in effect, results in increased speed by accessing data from the fastest and nearest nodes available – a Bitcoin miner in Tokyo could access a node also located in Tokyo. Not only could he/she access a node; the miner could actually own one. This effectively democratizes the ownership and control of data by taking it out of large, company-owned servers and into distributed nodes owned and controlled by individuals in different geographical locations.
Aside from speed and capacity, decentralized storage can also serve as a safeguard against hacking and outages, unlike traditional storage methods that rely on one or two primary servers and maybe the same number of disaster recovery sites. In the event of an attack on one node, the other nodes will continue working, especially if they are in other locations.
The sooner that blockchain users and decentralized storage advocates realize that they have more in common than they thought, the faster and more secure tomorrow’s cryptocurrency transactions would become.