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What is Siacoin? Guide on Sia’s blockchain, its history and how to buy SC

What is Siacoin?

Siacoin provides a decentralized cloud storage facility which facilitates payments using blockchain technology. Siacoin stakeholders can host or rent storage space, carry out mining of Siacoin and also make their contributions in developing the Siacoin platform.

All payments made on the Siacoin platform are paid using Siacoin, which allows the team behind Siacoin to do things that other payment methods, such as the use of credit cards would not.

Siacoin utilizes the capacity of blockchains to help distributed networks attain consensus through a secure and transparent way. The smart contract on Siacoin is cryptographically secured so that no unauthorized third party can tamper with them.

Siacoin allows individuals to make money out of renting their unused hard drive space, unlike the traditional cloud storage platforms that are solely owned by companies. Siacoin also ensures data integrity through the use of cryptography and redundancy.

History of Siacoin and Team

CEO David Vorick and Luke Champine started Siacoin during the HackMIT hackathon on September 2013. Both David Vorick and Champine are graduates of computer science from the Rensselaer Polytechnic Institute in Troy, New York.

After the hackathon, Vorick and Luke embarked on the project full time with funds received from a crowdfunding campaign carried on the NXT platform by selling Sianotes that were later exchanged for Siacoins.

According to the official Siacoin page, the team has four developers, a community manager, and an operations manager.

So, how does the Siacoin platform work?

Siacoin

Fundamentally, Siacoin works by eliminating the cloud storage monopoly and giving it to individuals. By doing so, Siacoin provides a peer-to-peer storage ecosystem for individuals to rent out space. The Sia platform comprises of:

  1. Siacoin Transactions

All the services that are provided on the Sia network receive their payment through Siacoin, and the transactions are secured by the filing of contracts and the proof-of-storage system.

  • Storage Ecosystem
Image result for siacoin proof of storage

Siacoin’s platform consists of two parties, the hosts and the users, also known as providers and clients, respectively. It is the platform that allows users to get storage space from the providers, and the hosts get compensated in return.

Siacoin’s ecosystem creates a flexible storage system for investors and other stakeholders. It free-market driven and hosts are given the liberty to set their prices, advertise, and also set guidelines on penalties should there be an issue with the storage space they provide.

Additionally, the providers have the liberty to deny services to any client that they find not to have met the requirements on parameters such as type of data (e.g., illegal or sensitive data).

Even though it is a free market ecosystem, Siacoin’s platform has put in place policies to protect clients. Clients have the right to split their data and store it with several different providers for added security, i.e. If the data stored in one storage space gets lost, the client can retrieve it from another provider they had contracted to store a copy of the data. 

Users on the Siacoin platform can incentivize their hosts on top of paying the storage fees. The incentives motivate the hosts to provide better services by providing faster uploads for documents and other assets as well as responding quickly to customer requests.

  • File Contracts

When a provider and a user agree to do business, they have to draft a contract. The contract defines the terms and conditions of the business, ensuring that the parties involved conduct themselves accordingly. The contract is then stored on the Siacoin blockchain while the provider stores the data.

The terms of the contracts are flexible based on the prevailing circumstances. If a client decides to go for affordability at the expense of reliability, he/she has the right to do so, and if the client chooses to charge more for mass storage, they can do so as long as both parties agree on the terms.

User’s on the Siacoin platform choose a provider based on the reputation of the provider and the needs of the user. In the same manner, a host is obliged to determine whether or not they will be able to accommodate the client based on the needs and demands the client brings forward.

When drafting a contract, a user has to upload some Siacoin into the contract to cover payments. Every time the user stores new data, a certain amount is deducted from the balance and given to the provider. If at the end of the contract the balance has not been used up, it is returned to the user’s wallet.

  • Proof of Storage

Sia implements the proof of storage algorithm to protect the clients from unscrupulous hosts on the network.

Image result for advantages of siacoin

Before a provider can receive payment, he/she has to provide a set number of proofs to the system within the time frame provided for by the contract. In a case where the provider is unable to deliver the proofs within the required time, the payment is sent to a missed proof address until the required proof is submitted.

If the provider misses too many proofs of storage mandates, their network can terminate the contract entirely.

Benefits of Siacoin

I.    Security- Sia distributes files to several servers and creates copies of the data on different hosts so that if one server malfunctions, the data is not lost.

II.    Privacy- it is only the user that has access to the encryption key to his/her data; hence, no one can access the files.

III.    Relatively affordable- Siacoin allows for decentralized and privately-owned cloud storage at a fair price compared with the existing cloud storage providers that offer centralized services, unencrypted data, and at a high cost.

How to buy Siacoins

Siacoins can be purchased from exchanges such as HitBTC, Bittrex, UPbit, OKEx, CHAOEX, XT and Poloniex using either Bitcoin or Ethereum.

It is important to note that not all exchanges accept direct fiat deposits or purchases. For such exchanges, it is required that first time buyers buy other cryptocurrencies like Bitcoin, Ethereum or Litecoin from exchanges like Coinbase.

After the purchase has been done, they can then be transferred to exchanges like Binance or the others listed above and then exchanged for SC.

Storage of the Siacoins

For an investor to store his/her files with Siacoin, they have to download a wallet to store the coins. Other wallets that can store Siacoins include Ledger Nano S, Sia UI (which is the official wallet created by the team behind Sia) and, Sia Cold storage.

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coinmag

Daniel is a determined and experienced writer with a keen eye on emerging technologies. Daniel aims at educating the crypto community on the developments within the space.

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