How Did Decentralized Cloud Storage Emerge?




Apr 14, 2023

Decentralized cloud storage is the result of countless changes and updates made to the internet ecosystem at large. It is, therefore, necessary to look at how the internet transitioned from its various phases to the current phase to put things into perspective.

When the internet was in its nascent state (or during Web 1.0), the majority of the users were consumers. Most of the data that was hosted on the internet was through on-premise servers. In more simpler terms, the internet acted as a content directory network for most of Web 1.0. With the advent of social media and rise in content creation, we transitioned to the next phase of the internet– Web 2.0 (2000–2010s).

When Web 2.0 came into being, there was a sharp increase in the number of online applications and platforms that allowed users to share their content, views, perspectives, and whatnot. As a result, on-premise servers ended up becoming a thing of the past. What the world next needed was cloud computing. Surely enough, cloud infrastructure was massively built over the period and most enterprises started relying on the cloud to store and host their data. Around this time, the content creators and users slowly started to lose the control over their data, information, and content. Centralized cloud authorities such as AWS or GCP became monopolies. More on this later. While the Web 2.0 phase was mostly about user experience and the innovations happening in the front end of the web, the next phase, Web 3.0, became all about the back-end.

Although the era of Web 3.0 is already here, the transition to Web 3.0 products and services is underway. This puts us at a key juncture in the history of the internet where control of the information and data hosted online is now put in the control of the creators and users. Now, users are slowly realizing the perils of centralization, censorship, and privacy-invasive practices that have plagued Web 2.0. In our next section, we dive deeper into the failures of traditional cloud storage and how they acted as a leeway for the inception of decentralized cloud storage.

Failures of Traditional Cloud Storage

Like we explained above, when Web 2.0 started becoming all about social media and content creation, the need for cloud computing and storage became indispensable. Some major players in the internet ecosystem, such as the Big Tech companies, started to monopolize the entire market of cloud storage. While solutions such as AWS, GCP, or Azure have all helped the internet evolve by offering reliable services, their mistakes are hard to ignore. Here are some of the prominent issues with the traditional cloud storage ecosystem:

  • Monopolisation & Anti-Competitive PracticeIf you have been following tech news, the number of anticompetitive accusations, lawsuits, and actions against companies such as Amazon is hard to ignore. Most of the accusations against monopolies such as AWS or Azure stem from practices such as predatory and below-the-cost-pricing. Giants such as AWS start to offer services at shockingly low prices, kill competition, and start to control the entire market. Now, we’re at a juncture where AWS and Azure, for instance, have become monopolies and are controlling the prices. Users, be it for enterprise or personal use, are forced to pay the prices charged by monopolies.

  • Dwindling Control Over DataAll the big players in the realm of cloud storage are for-profit companies whose only aim is to strengthen their bottom line. When the money from merely offering cloud infrastructure didn’t suffice, all the cloud companies started to commercialize user data and profit off of it. Amazon, for instance, has faced several allegations for prying into enterprise data and building competitive products at a better price; this essentially drives the enterprises that chose Amazon for cloud, out of business over time.

  • Mishandling Data & Poor Security MeasuresThis section is perhaps the easiest of it all. If one were to simply Google “AWS security breach,” countless articles would point out to all the instances where user data was blatantly jeopardized due to poor security measures. Amazon and other major players do not even offer “multi-region redundancy” — something that is a basic security and redundancy measure, as a part of their standard offering. Lack of such solid security measures puts enterprises and users at great risk of losing data.

What we have above is merely a snapshot of various issues with centralized storage. We have done a full-blown blog post talking just about the various issues with centralized storage. Check it out here:

The inception of Decentralized networks

All through the evolution of Web 2.0, decentralized networks were in the silos, with the earliest examples including solutions such as Napster and BitTorrent. While Napster is long gone, BitTorrent is still a force to be reckoned with. Centralized storage networks that were a large part of Web 1.0 and Web 2.0 facilitate the transfer of data through central servers. Decentralized networks, on the other hand, facilitate the data transfer through a number of peers distributed across a wide geographical area.

This model of data transfer changed a lot of things– users were in control of data, there was better transparency, and accessing as well as sharing one’s data did not have to be controlled by a central authority.

With growing time, privacy-focused minds that prioritized user independence and integrity over profiteering built solutions such as IPFS. We have written a full-length blog post about IPFS. Read it here:

With solutions such as IPFS, the transfer, and storage of data were made decentralized. But that wasn’t enough. For a decentralized network to stay up and running, incentives were to be put in place. Running a storage service as an open-source project for a benevolent cause, while being commendable, does not address the market needs of data storage. The cloud storage market is currently growing at a CAGR of 22.3 percent and is all set to reach 137.3 billion USD by 2025. There are two perspectives to consider here. One, there will be sustained growth in the adoption of cloud computing. Two, novel solutions will have space to compete with the current big players in the market.

Web 3.0 & Decentralized Storage of Today

If one were to look for decentralized storage solutions in the market now, IPFS, Filecoin, Storj, Sia, and Arweave would be some of the popular options. Read on as we provide a quick summary of each of the popular decentralized solutions of today:

  • FilecoinFilecoin is a decentralized, peer-to-peer storage network that relies on blockchain for facilitating the transfer and storage of data. For incentivizing the whole process, Filecoin has its own native crypto currency, FIL. It is also worth noting that Filecoin is an innovation on IFPS and attempts to solve the issues with HTTP of the traditional, Web 2.0 internet.

  • SiaSia is another decentralized storage network that relies on blockchain technology, much like Filecoin. That said, Sia is more feature-rich and offers an easy-to-use API for developers. Although Sia is open-source, it charges a hefty two USD per TB of storage per month. While the services offered by Sia are a step-up when compared to Filecoin, especially in terms of the usability and ease, the prices make it a premium option especially when compared to traditional cloud storage options.

  • StorjStorj too is a decentralized storage network, and is mainly known for its strong redundancy against server failures, strong security, and download speeds. Each file uploaded on the Storj network is automatically split into 80 pieces across a number of servers. But the complex user interface of Storj, such as having to depend on its command line for instance, makes it difficult for traditional cloud storage users to switch to decentralized storage networks.

What we’ve covered above are some of the decentralized storage networks and providers. For a full overview of the major players in this area, check this link out.

Arcana Network — a Viable Alternative to Traditional Cloud Storage

Arcana Network is a decentralized storage network that incentivizes users through the $XAR token and is optimized for the storage of DApps and private data. While services such as Filecoin, Arweave, and IPFS are not practical solutions and are strong competition to the traditional cloud storage market, Aracana is.

Arcana offers Social Auth, Access Management, and KMS in an easy-to-use SDK that takes minutes to integrate for any developer. Check out the testnet on to know more about Arcana storage?

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About Arcana Network

Built for Ethereum and EVM-based chains, Arcana is the web3 infrastructure to easily onboard dApp users and enable user data privacy and ownership. Web3 developers use Arcana’s SDKs for a seamless, familiar user onboarding experience via social authentication and passwordless login. All user data is encrypted, secured with data access fully controlled by the users, and powered by blockchain.

Arcana has raised 2.7Mn USD from some of the leading investors and founders in the ecosystem such as Balaji Srinivasan, Founders of Polygon, Woodstock, Republic Crypto, and Digital Currency Group.

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Copyright © Arcana Technologies Ltd. All rights reserved.

Schedule a Demo

The call is completely free and no commitment is required.

Copyright © Arcana Technologies Ltd. All rights reserved.

Schedule a Demo

The call is completely free and no commitment is required.

Schedule a Demo

The call is completely free and no commitment is required.

Schedule a Demo

The call is completely free and

no commitment is required.