What is Storj? (STORJ)
The Beginner’s Guide
One of several competing crypto-powered cloud storage platforms, Storj allows any computer running its software to rent unused hard drive space to users looking to store files.
In this way, you can think of Storj as an alternative to cloud storage platforms like those offered by Amazon or Google. However, instead of a company owning and maintaining the software, Storj relies on software and a network of computers to manage its data storage.
Key to the network design is the STORJ cryptocurrency, which allows users to pay other users on the network to store their files. Likewise, users looking to sell excess storage capacity and bandwidth can earn additional money from these resources by accepting STORJ.
Notably, Storj audits its network through a random file verification every hour, which ensures its files are consistently being hosted by storage nodes.
During this process, Storj sends requests to node operators, who must send cryptographic proof that the data is still in their possession. Upon receipt of this proof, nodes receive a payment for storing and maintaining the file.
The auditing process is designed to maximize the quality of storage on the network, and so far, it appears to have succeeded in carving out a niche. Storj claims to have a network capacity of over 100 petabytes, and as of 2020, there are over 6,000 active nodes storing data.
For more regular updates from the Storj team, you can bookmark the Storj blog, which includes tips and tutorials on the network and its evolving technology.
Who created Storj?
Storj Labs, the company behind the Storj platform, was co-founded by Shawn Wilkinson and John Quinn in 2014. The newest version of Storj, V3, was launched in the fall of 2019.
In 2014, Storj labs raised 910 BTC (worth around $460,000 at the time) in a public crowdsale. In early 2017, the company raised $3 million in seed funding and, later in 2017, Storj went through a token sale, raising around $30 million.
How does Storj work?
Three main components contribute to powering the Storj network.
- Storage Nodes – Allow users to rent out excess space on their hard drive and reliably store and return data for a fee.
- Uplinks – Run on the client's machine and upload files to the network. Uplinks also coordinate with peers to store and retrieve data.
- Satellites – Coordinate traffic between the storage nodes and uplinks. Satellites are responsible for storing metadata, keeping storage nodes honest and distributing payments. Each user has an account on a satellite.
Segments and Stripes
Once a user’s uplink receives permission from their satellite to store data on the network, Storj files go through a process called segmenting.
During this process, files are compressed, encrypted and subsequently shred, meaning they are split into many segments and stripes. (A stripe is a division of a segment.)
The stripes of the original files are then distributed and stored across the network. To decrypt and retrieve their files, users must provide the same private key used to compress and encrypt their files in the first place.
Of note, if a segment is small enough, then it will most likely be stored within a satellite, rather than on a storage node.
In order to account for nodes going offline and potentially losing a stripe, Storj introduces the concept of redundancy. This is a means by which all stripes are replicated a certain number of times and sent to different storage nodes in the network, a feature that prevents tampering and censorship by any small number of nodes.
Why does STORJ have value?
The STORJ cryptocurrency derives its value from the utility of its network, as it is the preferred form of payment within the software.
This means clients can buy and spend STORJ in order to store files, and that storage nodes may receive and sell STORJ in order to be compensated for their extra space and bandwidth.
Importantly, Storj is not the only cryptocurrency project seeking to disrupt the storage market, meaning it could face competition that puts pressure on the price of its cryptocurrency.
Like many other cryptocurrencies, the supply of STORJ tokens is limited, meaning that according to the software’s rules there will only ever be 500 million STORJ.
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Why use STORJ?
Proponents of Storj may be enticed by the ability to buy, sell and control their data, taking back a service now provided only by corporate giants like Amazon, Microsoft or Google.
Privacy-minded network users can also store their files without concern that their information is being looked at and without being targeted for ads based on those files.
This use case continues to attract potential users to Storj, and its cryptocurrency, as well as competing blockchain-based cloud storage systems.
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