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Decentralized Storage: Full Control Over Data, Security and Privacy
Harshit Mehndiratta
July 26, 2022
Decentralized Cloud Storage

In recent years, Decentralized storage system has seen quite a rise between organizations, developers, and consumers. The lack of flexibility, transparency, and high cost are major reasons why companies are shifting from traditional centralized storage solutions to decentralized storage technology.

Unlike a centralized storage solution that holds all your confidential data in one place, decentralized storage systems are made up of a network of operators around the world who stores your mission-critical data securely. Storing data in a decentralized manner results in a more affordable, flexible, and resilient file storage system that can be easily utilized by any user, size of business, or organization.

Blockchain Storage

A decentralized storage solution can use a blockchain-based system consisting of different fault-tolerant processes based on vendor implementation.

We at Züs utilize a proof-of-stake blockchain mechanism that securely handles storage operations on the network. Our chain is constantly growing with storage providers around the world to store inevitable amounts of data without undermining our commitments to privacy and transparency.

When selecting reliable decentralized storage (dStorage) solution for your organization there are many things to consider.

  • What blockchain fault-tolerant mechanism does the solution work on?
  • What are the data governing policies?
  • What are the costs of performing decentralized storage operations?
  • Why this is a better option than centralized storage solutions?
  • What is its presence in various industries?

In this article, we will be explaining all of these factors so you can have a better perspective on decentralized storage technology (dStorage).

Starting from the blockchain mechanisms in decentralized storage,

Decentralized Storage Blockchain

Thanks to Bitcoin! Blockchain technology has expanded to many domains in recent years and now organizations are using it for secure data storage. To understand how blockchain complements the storage processes We have to dwell back into history a little bit

The process dates back to the peer-to-peer (P2P) file sharing system such as BitTorrent which was popular for downloading music and files. The mechanism P2P systems used was very similar to what decentralized storage solutions currently implement.

In P2P storage, files that have to be shared /downloaded are maintained as copies by the users of the network, this is similar to the decentralized storage system which consists of storage providers that provide their hard drive space to store data.

The big difference is decentralized storage solutions are extending this to large-scale organizations and using blockchain consensus and incentive mechanisms to securely participate in the network.

In a typical blockchain network setup, the data is stored as blocks by participants known as miners which are rewarded for their participation to provide computing power for solving complex algorithms and validating these blocks. Each block that gets validated is impossible to alter which makes the data on the blockchain secure.

A decentralized storage setup blends blockchain security with traditional cloud storage to create a reliable and transparent storage mechanism. A decentralized Blockchain storage network maintains a ledger of all the confirmed/validated storage transactions on the network. The storage files are stored in small chunks across the network and are secured with encryption and kept private using cryptography hashes.

To understand the dStorage mechanism we will use our Züs dStorage platform as an example, Züs uses a proof of stake blockchain consensus mechanism with sharding and blobbers. Sharding is a process of partitioning the blockchain into smaller chains to compute more efficiently while blobbers/storage providers work as an incentive for all the entities who get involved and get paid for their contributions. The avid contribution by storage entities around the world also helps in keeping the overall costs of decentralized storage down.

Decentralized Storage Crypto

Blockchain Cryptocurrency

Before we discuss decentralized storage with cryptocurrency, let’s try to understand from where it originated. Crypto coins are launched directly with a particular blockchain to trade natively on the network.

In the same manner, dStorage platforms have their storage crypto with a particular type of blockchain. These tokens can be used with projects built within the blockchain and the main benefit of crypto tokens over traditional currency is that it helps in keeping the blockchain underlying structure secure, cost-efficient, and private.

Using any traditional currency for renting storage space on centralized storage providers can cost you hefty exchange conversion fees/taxes since they are maintained by centralized authority whereas storage cryptocurrencies operate in a decentralized way without any mediators.

Currently, in the market, there are various storage coins available such as Filecoin(FIL), Storj(STORJ), and Züs(ZCN) whose prices differ from each other depending on their market capitalization. All of these storage coins are used by vendors as a currency to pay users who are renting out their storage space and can be used to exchange for other fiat and cryptocurrencies.

Best Decentralized Storage

Decentralized Storage Chain

There are a wide variety of decentralized storage solutions available in the market through which you can earn incentives in their native cryptocurrency by renting your storage space. In this section, we will be discussing the best-decentralized storage solutions that you can use right now.


FileCoin decentralized cloud storage platform rewards people with their native cryptocurrency(FIL) to users who provide their storage space on rent for hosting files.

The process is quite easy the storage provider joins the network which makes the unused storage capacity on their system used for users and organizations who need space for their files.

The files stored on the storage provider’s hard drives are secured with end-to-end encryption so third parties cannot access your data.

To join the network for providing storage and earning Filecoin crypto check here


Storj is another established decentralized cloud storage solution that you can use for storing your files. Just like Filecoin, the files are kept encrypted and private to avoid data breaches.

To provide a decentralized storage mechanism, the files are split into smaller chunks and stored on different storage providers’ PCs around the world. In case a file is requested it will be combined again by fetching the parts from different computers connected via Storj dStorage network and made available for view and download.

Earning money by providing your storage space to Storj is a three-step process check the instructions here


Another popular option on the decentralized storage solution list is Sia which also uses blockchain technology for securing files and folders. Just like Filecoin and Storj, Sia also utilizes unused storage space from computers around the world to provide extremely low-cost cloud storage compared to traditional cloud storage solutions.

With Sia, the security and privacy of files also stay intact, the files are encrypted and people who have access to these files are only able to access them. No intermediaries or regulating authorities can access your data as the platform does not make use of centralized storage servers.

To know how to rent your storage space to Sia check the instructions here

Centralized Vs Decentralized Storage

DStorage Benefits

There are certain advantages that decentralized storage has over centralized storage which makes it an emerging and more trustworthy data storage option for the future.

Data Ownership

Users hosting data and applications using centralized cloud storage solutions are highly dependent on their data storage policies. The centralized authority can monitor, disclose or censor the data (dependent on their regulations) which can actually take ownership of the data from the user’s hands.

But in the case of decentralized storage providers, the data is stored in smaller chunks across distributed computers on the network which secures the data from any intermediaries or centralized authority who wants to take control or regulate your sensitive information.

Additionally, with the use of decentralized storage systems, the owner’s personal information is kept private which is not the case with centralized storage systems.

Storage costs

When using centralized storage solutions centralized providers can likely control the price of storage servers, and bandwidth and charge you a premium based on their availability and demand

This is not the case with decentralized data storage solutions, the dStorage network consists of thousands of nodes that stores data in a distributed fashion across the world. This results in a large amount of storage space available which makes the pricing fair for users.

No participant in the dStorage network can charge a premium price since there are plenty of storage providers available at affordable prices. This can helps organizations in keeping the overall cost of storage notably lower, compared to the centralized cloud storage system.

Data Security

Under a centralized cloud storage ecosystem, servers are typically located in a single area or geographic region. This can increase the chances of your data getting wiped off or not becoming available in case of a power outage or a network failure.

But with decentralized storage, this is not the case the data gets encrypted and distributed across multiple computers on the network which not only provides high file availability in case of a power outage but also provides extra file security in case of data breaches.

Data Transmission and speed

The speed at which data gets downloaded or retrieved from storage servers makes a big impact on how enterprises around the world function. In the case of centralized storage servers, data transmission tends to become slower as you start moving away from the central location of the file server.

But when using decentralized storage solutions this is not true, dStorage network utilizes a peer-to-peer (P2P) network which stores file at different locations for fast download and retrieval of files

Decentralized Storage Projects

With Decentralized storage(dStorage) gaining popularity in recent years there are already various options available in the market to extend functionality and develop dStorage solutions. We will be discussing the most established ones in this section:


IPFS or InterPlanetary File System is a peer-to-peer (P2P) protocol that can be used to build decentralized storage solutions by developers. Launched as a beta in 2015, IPFS is a quite mature project, for sharing and storing content in a decentralized manner.

IPFS rose to popularity because of its peer-to-peer content retrieval mechanism in which thousands of peers around the world works as nodes to run a secure decentralized content network.IPFS voids file duplication which means identical files are only stored once on IPFS nodes resulting in low storage costs. overall.

Currently, IPFS is utilized by many dStorage vendors to make storage more transparent safer, and faster. Check the list of IPFS projects backed by companies here or check the FAQ for more specific information.


Filecoin is a decentralized cloud storage project that provides APIs, and toolkits for developers to build applications over their dStorage mechanism.

Filecoin utilizes IPFS for decentralized file storage which means files will be secured and encrypted using cryptographic proofs with a unique content id.

Filecoin aims to address HTTP limitations for distributed storage with its IPFS-based offerings. Also, Filecoin has been known in decentralized storage space for one of the largest initial coin offerings(ICO) of all time which may help in supporting the wide variety of IPFS use cases and applications.

Storj DCS

Storj is another secure and private s3-compatible decentralized cloud storage project that seamlessly works with a wide variety of centralized developer tools and apps.

Storj DCS can be easily integrated with popular file-storage tools such as FileZilla, MongoDB, and Rclone, This opens doors for developers who wanted to develop new capabilities, and services around the decentralized ecosystem while utilizing the benefits of tools currently used by leading centralized storage providers.

Decentralized Storage Networks

A distributed storage solution always has a decentralized network of clients that securely helps in storing files and eliminating data failures. The decentralized storage network also acts as a gateway for those who wanted to rent their storage space and for those who want secure and affordable storage for their files.

Decentralized storage networks can be entirely based on blockchain mechanisms or can be combined with an array of technologies to enhance the functionality of blockchain. Overall a dStorage network aims to improve data resiliency, privacy, and security by reaching a consensus without the involvement of any centralized authority.

All the participants of the dStorage network have to meet the consensus by proving they have stored the same version of the file during the time it is requested. The duration for which the file has to be stored is configured via a smart contract between storage providers and customers.

Different decentralized storage networks can make use of different consensus mechanisms based on the use case or a specific industry. In the next section, we will have an overview of the advantages of blockchain-based storage systems for IoT computing devices.

Decentralized Storage For IoT

The biggest challenge with IoT computing devices is their reliance on centralized storage models.  The whole IoT ecosystem is connected and authenticated via an expensive centralized storage server.  Each request has to be routed via the internet even if it is called from a building nearby or from a place located in another country.

This storage mechanism can only fuel up the IoT networks of today.  However, it will not be a feasible option for handling large-scale IoT ecosystems which are the need of tomorrow.

To handle huge IoT networks, the high infrastructure and maintenance costs of a centralized cloud should be substituted with a secure and affordable decentralized network approach. The decentralized network approach will connect all IoT devices through a single platform.

A decentralized IoT network would not only address the challenges mentioned above but will also increase the capacity to process IoT transactions per second via a peer-to-peer approach. The cost to maintain and install high-compute centralized data centers will also decrease significantly since the IoT storage processing will be distributed across a large number of devices on a decentralized storage network.

However, there can be challenges in terms of new consensus models for confirming IoT transactions. A secure and revised IoT consensus mechanism is highly required for protecting sensitive data and maintaining anonymity on networks.

Concluding Thoughts

We hope that you can get a better perspective on dStorage technology through this article. Whether you should replace your current centralized storage mechanisms with a decentralized storage solution? We leave this decision to you.

There are many established centralized storage solutions available in the market such as Amazon, Dropbox, GDrive, etc.  Currently, they are the epitome of the current cloud storage scenario but the drawback is this they have created a storage system that has become outdated according to the current data privacy and storage requirements.

This is where decentralized blockchain storage networks come to the rescue, these systems are fostered for the future and strive to provide transparent and sustainable storage that can better fulfill customer needs.


About Züs

Züs is a high-performance decentralized storage network designed to eliminate business threats such as censorship, privacy liability, and data breaches. Zus helps entities achieve GDPR compliance, localization, and tokenization, and monetizes private data sharing.


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