What Are Crypto Storage Tokens?
Crypto storage tokens are a relatively new niche within the cryptocurrency ecosystem. They focus on decentralized cloud storage, with developers aiming to bring the cloud storage industry into the blockchain age.
CoinMarketCap gives you a beginner’s guide to cloud storage tokens, their use cases and the current shape of this nascent sector.
Crypto Storage Tokens Explained for Beginners
Crypto storage — essentially blockchain storage on a more technical level — refers to using decentralized technology to store any form of data.
Crypto storage tokens are altcoins which are native to providers of these cloud storage services. They can fulfil any number of functions, from aiding security to providing user incentives, the latter being especially common.
The whole idea of decentralized storage is nothing new, but having a token built in to the experience remains a fairly unexplored area of cryptocurrency.
CoinMarketCap currently lists 18 crypto storage tokens as of fall 2020, according to our listing criteria. Of these, the largest market cap belongs to BitTorrent (BTT), the token of the well-known distributed file sharing platform.
BTT functions as a hub for various BitTorrent features, and is the basis for a range of dedicated decentralized applications (DApps). Users can also earn rewards in BTT for engagement activities such as seeding on the network.
Beyond BTT, perhaps the best-known crypto storage token is Siacoin (SC), which has been on the market since 2015.
SC forms the native token of decentralized cloud platform Sia, which aims to use blockchain technology to solve the inefficiencies associated with traditional cloud storage.
These crypto storage tokens are freely exchangeable on major trading platforms, and the 18 entrants on CoinMarketCap’s listings already have a combined market cap of over $1 billion. This remains, however, a tiny fraction of the overall cryptocurrency market cap in fall 2020 — around 0.3%.
The DeFi phenomenon, by contrast, has grown into a multibillion-dollar industry within a matter of months, incorporating roughly 100 tokens with the number constantly increasing.
Why Crypto Storage?
Cloud storage is ubiquitous nowadays, but the industry’s rapid growth has quickly highlighted the shortcomings in the “traditional” model.
Centralization has been the main source of finger-pointing, the word synonymous with weak security which has often cost cloud storage companies and users dearly. A hack of Dropbox in 2012, for example, leaked the user data of an estimated 68 million people.
Blockchain storage aims to fix these kinks in the chain by removing third parties from the equation. Much like other applications of blockchain technology, companies are also aiming for other benefits such as reducing costs, maintaining fewer physical assets and securely automating as much of the process as possible.
These savings are then passed on to users themselves, and the difference is already plain to see. Decentralized cloud storage of one terabyte of data, for example — more than enough for the needs of most private users — now costs around $1 per month.
Users control their data without the need of any intermediary, while the economic benefits of token rewards could even net them a profit for participation.
