Given that decentralized storage providers have been demonstrated to be the backbone of Web3, what does this indicate for centralized web service providers?

The revolutionary idea of one day owning and managing one’s data has increased interest in Web3’s many platforms and applications. For instance, current data reveals that the Web3 business was valued at roughly $2.9 billion a year ago. However, it is expected that by 2028, this number will climb to $23.3 billion. According to Cointelegraph Research’s results, the Web3 business will be the most sought-after sector for investment agreements in 2022. This fact is attracting the interest of venture investors.

The results of the Huobi Research Institute indicate that growth in the volume of data stored worldwide will increase the cost of security and the amount of energy used, pushing the trend toward decentralized storage. The following extract is taken from the report: “The demand for global storage systems has evolved from remote storage to instantaneous cloud storage to blockchain-based decentralized storage, which we will refer to as Web3 storage.” Individuals would be able to store, retrieve, and manage their data if decentralized storage solutions were deployed entirely due to the growth of Web3.

DISASSEMBLING THE DECENTRALIZED STORAGE SYSTEM

If one wants to comprehend the potential behind decentralized storage, it is vital to define what these solutions provide and how they vary from centralized systems. Marta Belcher, president, and chair of the Filecoin Foundation, the organization that promotes the administration of the Filecoin network, told Cointelegraph that decentralized solutions provide an alternative to centralized ways of storing data and making websites accessible. She said,

The Internet, as it now exists, is very centralized. Currently, the great bulk of the data used to generate the websites we visit daily is housed in data warehouses controlled by just three companies: Amazon Web Services, Microsoft Azure, and Google Cloud. Due to their reliance on a single point of failure, these companies often experience blackouts, rendering substantial areas of the Internet unreachable for many hours. This is one of the hazards that their business approach presents.

In light of these obstacles, Belcher explained that decentralized storage providers such as Filecoin can create an enhanced version of the Web by combining the storage capacity and computing power of numerous individual devices into a network that functions like a supercomputer and can store multiple copies of the same data. She explains that “on this decentralized version of the Internet, websites remain accessible even if certain nodes fail, and data availability is not dependent on a single server or organization

Belcher said that Filecoin is built on the concept of programmable money and establishes a decentralized storage network utilizing it to facilitate this process. “If a user has extra storage space on their computer hardware, they can rent it out to others, who will then pay them in Filecoin tokens if they want to take advantage of this option.” She said we view this as a foundational web technology for the next generation.

According to Belcher, the Filecoin system is based on an incentives paradigm, meaning that users are reimbursed each time they save data to the network. According to Belcher, the network has 18 exabytes of storage capacity and more than 4,000 storage providers that support more than 1,460 new projects, and the Filecoin model has been successful so far.

Belcher noted that centralized storage systems such as Amazon Web Services (AWS) rely on a particular server or company to store and disseminate data, which may appear odd to some. The InterPlanetary File System, sometimes known as IPFS, is Filecoin’s underlying technology.

She said that by combining content addressing with a cryptographic hash, the IPFS retrieves data based on what it is rather than where it is stored. “Rather of retrieving stuff based on its location, the IPFS retrieves content based on its nature,” she said. Due to this, the availability of content is no longer dependent on a single server or organization. This increases the speed at which information is retrieved, hence decreasing network latency. Belcher remarked that the Filecoin Foundation has recently announced a partnership with the defence firm Lockheed Martin. This alliance aims to provide interplanetary networking in space. In her words:

Imagine a satellite on the moon, with a delay of several seconds in the data travelling from the moon to Earth. IPFS might enable satellites to instantly retrieve data from the locations that are physically closest to them. This expedites the process of system-to-system networking.

John Gleeson, chief operating officer of the decentralized storage network Storj, told Cointelegraph that decentralized infrastructure poses the greatest danger to the centralized Internet.

Belcher said that the initiative is now in the experimental phase, despite the revolutionary nature of the concept. “We are still in the process of choosing the demonstration mission that will make this space technology practical,” Belcher said that most nonfungible tokens (NFTs) are stored on IPFS and that many users may not even be aware that they are currently using IPFS for data storage. Many users may not even be aware that they are doing this. She said that sensitive digital records of human history are held on the Filecoin network, which is used by the Starling Lab project, a collaboration between Stanford University and the Shoah Foundation research centre at the University of Southern California.

To build a Web2 service that can compete with Amazon Web Services (AWS), Google, or Microsoft requires billions of dollars. Decentralized infrastructure offers the ability to construct more private, secure, performant, and cost-effective infrastructures than Web2 hyperscalers. Crowdsourced capacity, trustless abstraction layers, and token-based incentives make this viable.

Contributors are compensated for their bandwidth and storage space donations. Gleeson remarked that the Storj network consists of “storage nodes” that are utilized to store data for the benefit of other users, similar to the Filecoin incentive model. According to him, “all data stored on storage nodes is encrypted and erasure-coded on the client side.”

Gleeson said that “uplink clients” are used by Storj to enable developers to store data on its decentralized cloud storage. Each file is then divided into eighty smaller pieces before being distributed over the network of storage nodes. “Each of the eighty components is stored on separate independent storage nodes with different operators, power supplies, networks, and geographies, etc.,” Gleeson said, “resulting in significant security, performance, and durability advantages.”

Even though the functionality offered by Filecoin and Storj is relatively unlike that of centralized systems, several Web3 platforms need these solutions to work successfully. Ankr Network, a decentralized Web3 infrastructure provider, aids a range of blockchain businesses with the operation of their node infrastructure, for example.

Ankr’s chief marketing officer, Greg Gopman, told Cointelegraph that 17 of the top 20 proof-of-stake blockchains provide access to their blockchain data through Ankr’s remote procedure call (RPC) service. RPC is an abbreviation for “remote procedure calls.” A node must satisfy an RPC request before it can be processed by Ankr, which, as Gopman said, is the core function of the Ankr platform. Gopman claims that Ankr saves blockchain transactions and node images using Filecoin and Storj. Filecoin is used for blockchain transaction storage. He said:

“Our solution is used by BNB Chain, Polygon, and Avalanche, and we speed up our operations by using decentralized storage providers. We can deploy a new cluster node ninety per cent faster if we utilize decentralized storage providers instead of Amazon Web Services (AWS).

Gopman gave the background for this method by describing how Ankr operates archive nodes for several blockchains. He says that “the ‘archive node’ is all the transaction history data from a blockchain network.” “The ‘archive node’ comprises all past data,” he said. Since Ankr is responsible for administering these archive nodes for several blockchains, the platform must have a snapshot of every transaction on a particular network. This information is transferred to a server, and a new node is started.

Gopman continued by stating that Ankr had first depended on AWS for this approach but that the platform was more difficult and expensive. Even though AWS is meant for distributed systems, we still need servers to execute profiles for decentralized infrastructure. In addition, we have around thirty geolocations compared to AWS’s thirteen.

The spread of non-centralized web services.

To provide a comprehensive suite of decentralized online services for the Web3 economy, a range of other solutions are also being offered in addition to storage. The Akash Network, which operates as a market for idle computer resources, is one such instance. According to Greg Osuri, CEO of Akash, the cornerstone of Akash is an auction marketplace that allows users to publish requests to suppliers with infinite computing capacity. According to Osuri, pricing is controlled by the market, resulting in cost savings 97% less than those provided by AWS. Osuri has given Cointelegraph this information.

Osuri said Equinix Metal, one of the world’s top providers of data centre and infrastructure services, interfaces with Akash to offload its processing resources in a decentralized manner.

Furthermore, Web3 efforts use distributed computing infrastructures. Colin Pape, CEO of the decentralized search engine Presearch, told Cointelegraph that users might operate nodes for their platform on Akash. According to Pape, the Presearch user nodes are in charge of collecting search results from all across the Web and act as the network’s power source. When node operators accurately answer a user query, they are compensated with PRE tokens. This is comparable to the operation of other incentive-based systems.

Pape said that the Presearch network is powered by more than 70,000 user nodes distributed worldwide. Even though many of these nodes are currently running in data centres, this is the case. Even though many of these nodes operate on a virtual private server (VPS) in a data centre, Presearch encourages node owners to run their nodes on as many platforms as possible. Because they are more scattered than nodes that operate in a single instance, he observed that decentralized cloud providers are beneficial for providing an additional layer of network resiliency. This is because decentralized cloud providers are more dispersed.

It is also significant that solutions capable of aggregating different types of decentralized storage networks are starting to materialize, highlighting the industry’s development. Max Li, the chief operating officer and founder of Computecoin, told Cointelegraph that the company’s objective is to supply all of the core AWS services in a decentralized fashion. Included in these services are processing, storage, and machine learning. “Our storage system, known as Oortech Storage Service (OSS), provides customers with a Web2 interface and a decentralized storage solution. As he remarked, OSS aggregates decentralized storage networks such as Filecoin, Storj, and Crust rather than building the infrastructure from scratch, “much like how Expedia aggregates hotels.”

According to Li, the purpose of open source software (OSS) is to make decentralized storage options more accessible. Considering that there is a steep learning curve for end users who use decentralized web solutions, he believes this is vital. “Developers will require at least two weeks to get comfortable with the Filecoin website deployment procedure. As he said, it is feasible that deployment of a website on AWS would take less than an hour. Li stated that non-cryptocurrency natives must learn how to utilize crypto wallets to acquire Filecoin tokens on exchanges and then use those tokens to store data.

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Will distributed solutions for data storage surpass centralized web services in popularity?

However, the benefits of using decentralized web solutions may outweigh the dangers associated with utilizing these platforms, at least in the case of Web3 initiatives. Gleeson, for instance, asserts that decentralized storage solutions provide enhanced levels of privacy, performance, durability, and cost-effectiveness. “Users control their encryption keys for any data and metadata stored on the Storj DCS service.” As he said, as a result, consumers maintain control of their data, and it is difficult to compromise users’ information.

Instead of investing in new money, decentralized cloud storage crowdsources capacity via operating expenses, according to Gleeson. He said:

Decentralized cloud storage provides equal durability and availability to centralized cloud storage for 80 per cent less than Amazon Web Services (AWS). This is made feasible by tapping into vast amounts of latent capacity around the globe and paying just for what is used.

In light of this, it is unclear if centralized storage solutions will become obsolete soon. According to Gleeson, as the decentralized technology evolves and matures, the use cases will become more transparent, and companies will begin to see the benefits of using the platform. Consequently, he thinks that usage will accelerate, especially as the entirety of the decentralized stack continues to evolve with computation and toolkits for common integration patterns. On the other hand, Gleeson is fully aware that decentralized storage and other services are still relatively new technologies and thus need additional development. He said, “IPFS, for instance, provides content addressing and is new, yet some of the largest IPFS pinning services keep data with centralized providers.”

According to Wilson Wei, co-founder and chief operating officer of CyberConnect, a decentralized social graph platform, AWS provides a broader range of services than storage alone. Wei supplied this information to Cointelegraph. As a consequence, he believes that AWS will not go extinct. Wei continued by stating that the bulk of the currently accessible decentralized storage options are unreliable if the suppliers are not financially motivated. He noted, however, that the condition of these incentives might become very unstable, resulting in a reduction in performance and data accessibility. He said:

When choosing between centralized and decentralized storage, trade-offs will always be involved. It is easy to host a front-end page using IPFS. However, if the website demands a complicated computing environment, the developers will still need to construct a compute instance on a cloud provider like AWS. This is because centralized servers can supply the most efficient and robust computer resources.