Top Decentralized File Storage and Sharing Services

The decentralized file-sharing industry is gaining more popularity with each passing day. Instead of storing data on a single centralized server, where it can be compromised or censored, decentralized filesharing offers censorship resistance and a robust way of storing data online. Blockchain technology helps to improve existing decentralized filesharing services by adding token incentives to nodes.

CoinMarketCap Academy looks at three of the biggest decentralized file storage and sharing services on the market:

Filecoin
Bullit
BitTorrent File System (BTFS)

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Filecoin

Filecoin is a peer-to-peer network for storing files that leverages blockchain technology to provide incentives for storage providers. Filecoin creates an open and decentralized market, where users pay to store their files, and storage providers receive Filecoin (FIL) for providing this service. Proof of storage is recorded on the blockchain, making Filecoin a transparent and fair market for file storage.

How Does Filecoin Work?

Filecoin is a distributed, peer-to-peer network consisting of Filecoin nodes and storage providers.

Filecoin nodes (or Filecoin clients) sync the blockchain and validate messages in every block. Nodes propose storage and retrieval deals (more on them later) to storage providers and pay for their execution. Filecoin storage providers execute deals and mine new blocks to the blockchain every 30 seconds. They receive FIL rewards in return.

Deals in Filecoin are split between storage deals and retrieval deals. Storage deals are agreements to store data. When accepting such a deal, the storage provider must repeatedly signal to the blockchain that the data is still being stored in order to receive FIL rewards. Otherwise, the provider's stake can be slashed. Retrieval deals are deals to extract data from storage providers. Retrieval providers may or may not be the same as storage providers.

Storage providers use cryptographic proofs called proof of replication and proof of spacetime to prove the data is being stored. The proof is being recorded on the blockchain.

Use Cases of Filecoin

Filecoin creates an open market with competitive pricing for data storage provision. With its low barriers to entry, anyone can participate in the Filecoin ecosystem, which sets prices based on market dynamics. Furthermore, storage providers on Filecoin create a track record of their services, creating incentives to provide reliable storage facilities.

Filecoin is censorship resistant and can adjust to market demand when content needs to be distributed to a multitude of users. Moreover, its blockchain consensus mechanism has a positive externality in securing safe data storage instead of creating negative externalities like proof-of-work blockchains.

Compared to traditional storage providers like Google or Amazon, Filecoin has several advantages:

It has a competitive and dynamic pricing structure.
Storage is decentralized and reliability is tracked publicly through the blockchain.
Applications can access all storage providers through the same API.
It has low barriers to entry for storage providers.
It is censorship resistant.

Filecoin Tokenomics

Filecoin has a maximum supply of 2 billion FIL. FIL is used to participate in the Filecoin ecosystem and pay storage providers and retrieval providers for their services. The distribution of FIL is as follows:

Rewards: 70%
Protocol Labs (the company behind Filecoin): 10.5%
Protocol Labs team: 4.5%
Filecoin Foundation: 5%
Ecosystem development: 2.5%

Bullit

Bullit is a filesharing service that allows encryption and sending of files and enhances privacy and control by using blockchain and NFT solutions. Bullits are encrypted file types that can contain any type and amount of content and can be encoded to be only opened by the intended recipient. In the future, Bullit plans to record transactions on the blockchain and convert files into NFTs for maximum privacy and control.

How Does Bullit Work?

A Bullit is a file generated offline by the Bullit system. It can be shared via the usual distribution channels like mail, messenger services, USB sticks, and others. Bullets can contain any type of information, such as:

A business plan
An audio track
Financial information
Video footage
Child protection data
Healthcare data
Legal documents

Bullit is encrypted and can be enforced to be opened offline only by a specified recipient via the authenticated app, and only after completing two-factor authentication. The Bullit system is open-source and public. Bullit is currently centralized but has plans to be decentralized in the future. The company also plans to offer Bullits as NFTs to enhance user privacy and control.

As an integrated file protection system built for the content owner, only the owner and the intended recipients can view the content. Therefore, Bullit offers the content owner privacy and control from any third-party apps or services that use Bullit as a cloud storage or file transfer service provider. Every user and file has a public key and a private key. Keys are not stored at any single party but instead divided between the system, the user, and the code.

Use Cases of Bullit

Bullit can be used in a number of ways:

Legal, Financial, and Insurance: To maintain confidentiality in corporate-client relations.
Corporate & Telecom: As a SaaS and consumer-to-enterprise solution.
Health Care: Bullit is HIPAA compliant and leaves a full audit trail.
Marketing & Entertainment: Bullit can track and capture who views communications and harvests email addresses.
Government: With its military-grade encryption and secure architecture, Bullit can be used for communication in the public sector.

Bullit offers secure file transfer, data storage, and emails. It can be used as an immutable proof of delivery, proof of opening, and proof of acceptance. Bullit can also enforce payment upon delivery and track who views content and when and where. Bullit is content, device, and channel-agnostic and can be used across different distribution channels and geographic locations.

Bullit Product Features

Several product features of Bullit are already live:

Encryption and Decryption: You can upload any file type and convert it into a Bullit and upload a Bullit to decrypt and view its content.
Terms and Conditions: You can upload the terms and conditions that the recipient must accept to open your Bullit.
Terminate: You can terminate content if you suspect someone to have breached your agreed terms.
Email Notification: You can receive a notification every time your Bullits are opened.
AI Protection: Bullit is protected with artifical intelligence.
Control Panel: Easy access to all incoming and outgoing Bullits.

Future features will include text notifications, paying to open Bullits, a radar function, multi signatures, NFT Bullits, recording on the blockchain, super user accounts, and more.

Bullit employs a zero-knowledge proof concept with the goal to keep user files private and secure. When a user uploads their file as a plain file to the system, the plain file is AES-256 encrypted and stored on a cloud storage service. By using the zero-knowledge concept, public keys are stored in the Bullit database, but private keys are stored in the client database. Thus, Bullit has no access to a user's data.

Bullit Tokenomics

Bullit plans to leverage its product through blockchain and NFT technology and will raise funds for its BULT token. BULT will be a TNT-20 token on Theta that will be used to incentivize users and pay for Bullit's services like subscriptions, notifications, and NFTs. BULT will have a circulating supply of 500 million with the following allocation:

Presale: 6% - vested 10% monthly
Staking rewards: 15% - vested 12.5% quarterly
Burn: 10% - vested 12.5% quarterly
Marketing: 14% - vested 12.5% quarterly
Team: 25% - vested 12.5% quarterly
Foundation: 30% - vested 12.5% quarterly

Bullit plans burn events after certain (yet undefined) milestones are reached. According to the project's roadmap, blockchain recording and full decentralization can be expected in September 2022.

BitTorrent File System (BTFS)

BTFS is a filesharing protocol in the BitTorrent ecosystem. Originally a peer-to-peer torrent sharing platform, BitTorrent was acquired by TRON in July 2018 and has added blockchain elements to enhance its value proposition. With BitTorrent, users can easily and securely share files in a peer-to-peer manner without relying on centralized counterparties or servers.

How Does BTFS Work?

BTFS facilitates filesharing through its BitTorrent client, a computer program implementing the BitTorrent protocol. Users can download from several hosts that provide the file for downloading. For instance, a file can be hosted by several computers in the network (called seeds) and then be downloaded via the BitTorrent network. Bigger files are usually split up into many smaller parts, allowing their distribution in a non-sequential and efficient manner.

Use Cases of BTFS

BTFS has seen particularly strong adoption in the entertainment sector. Although the protocol became popular for the distribution of pirated content, a growing number of individuals and organizations in the film and music industry distribute licensed content via BTFS. BTFS is also used in the software and gaming industry to distribute downloadable content and by the education sector to share large datasets.

BTFS Tokenomics

The total supply of BTT tokens is 990 billion BTT. BTT is used to incentivize network usage. For example, users can pay in BTT for faster downloads. BTT is distributed as follows:

Public sale tokens - 6%
Private sale tokens - 2%
Seed sale tokens constitute - 9%
Tron airdrop tokens - 10.1%
BitTorrent protocol airdrop tokens - 10%
BitTorrent Team and the BitTorrent Foundation - 19%
TRON Foundation - 20%
BitTorrent ecosystem - 19.9%
Partnership tokens - 4%

Storj

Storj is an open-source, decentralized cloud storage layer with inbuilt privacy and security. It enables developers to build applications with data protection and privacy in mind. Storj boasts trustless architecture and multi-region high availability with default encryption. That means only users with permission granted can access uploaded files.

How Does Storj Work?

The main component of Storj is its decentralized cloud storage layer (DCS). Users can upload files to the DCS, which are then encrypted and split up into 80 or more pieces that get distributed across the thousands of diverse storage nodes. Due to the high degree of decentralization (nodes are located in nearly 100 countries), there is no single point of failure that could prompt an outage, downtime, bitrot, ransomware, or data breaches. In case a node goes down, the file is not lost but can be reinstated from just 29 of its distributed pieces.

Furthermore, Storj offers a cost-efficient solution in comparison to centralized providers. For example, users can create a Storj DCS account and receive a free tier of decentralized cloud object storage with up to three projects with 50 GB of bandwidth each.

Storj Tokenomics

STORJ has a total supply of 425 million. 125 million STORJ have been publicly distributed, with 2.99 million STORJ going to service providers and 72 million sold to the public. The remaining tokens are in possession of Storj.

Siacoin

Siacoin is a decentralized cloud storage platform secured by blockchain technology. Sia aims to build a data storage marketplace that outperforms traditional storage providers by using idle hard drive capacity on computers around the world. You can upload files to Sia, where they get split up, encrypted, and distributed around different hosts worldwide. Once uploaded, files remain accessible since they are copied several times. Hosts receive only encrypted parts of an entire file, thus guaranteeing the full security of a user’s data.

How Does Sia Work?

Users can be either renters or hosts. A renter uploads files to other users that have made space available. These are the hosts. Sia acts as a marketplace that finds storage space from hosts for renters. The market rate is determined competitively by hosts and is listed in Siacoins. Sia quotes a typical network price of $2 per TB per month, with the possibility to become more cost-efficient as more data is stored.

Siacoin Tokenomics

Siacoins (SIA) are the network’s utility token used to facilitate network operations. Typical use cases of SIA are:

Uploading files and paying for storage.
Storing someone else’s data and receiving SIA.
Owning a share of the SIA network.

The total supply of SIA is unlimited. Siacoin argues that data is limitless, thus having Siacoin as the industry-standard storage layer requires an unlimited amount of SIA to accommodate this need. Siacoin has a declining rate of inflation built into its ecosystem, which tops out at 2.3% supply growth after year 20. Furthermore, future proof of burn mechanics aims to reduce the amount of SIA in circulation. The entire SIA token can be found here.

Conclusion

Decentralized file storage and sharing will likely only grow as blockchain technology breaks into the mainstream. Bullit, Filecoin and BTFS can be considered pioneers of this sector, and you should definitely give each of them a closer look.

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