What is Siacoin (SC)?

Deep Dive

1. Purpose & Value Proposition

Sia aims to disrupt traditional cloud storage (e.g., AWS, Google Cloud) by enabling users to rent unused hard drive space globally. Its decentralized model eliminates reliance on centralized providers, reducing costs by up to 90% while enhancing privacy. SC acts as the medium of exchange, funding storage contracts and incentivizing hosts to maintain uptime.

2. Technology & Architecture

Sia splits files into encrypted fragments stored across multiple hosts using erasure coding. Agreements are enforced via smart contracts, ensuring hosts only earn SC if they prove data integrity. The blockchain uses a Proof of Work consensus (Blake2b algorithm) similar to Bitcoin, but with a focus on storage-specific optimizations like Utreexo for faster node synchronization.

3. Tokenomics & Governance

SC has no maximum supply, with block rewards starting at 300,000 SC and decreasing over time (currently 30,000 per block as of 2025). This design ensures liquidity as demand grows, since storage contracts lock coins. A 3.9% fee from all storage payments goes to Siafund (SF) holders, a secondary token funding development.

Conclusion

Siacoin is the economic backbone of Sia’s decentralized storage ecosystem, combining blockchain security with competitive pricing. Its success hinges on adoption as a viable alternative to centralized cloud services. Could Sia’s trustless model outcompete traditional providers in an era of rising data privacy concerns?