Storj, The “Sharing” Economy and Why It Matters

March 18, 2017 § Leave a comment

The sharing economy is a buzzword which has gained enormous traction despite the fact that it remains misunderstood, in my opinion. The luddite politicians who have been vocal against it on the grounds that it’s a dishonest loophole for escaping regulatory frameworks have it obviously wrong, but I feel that even enthusiastic participants and users probably haven’t considered all it’s implications. It’s not just about creating internet marketplaces for everything. The true genius of the sharing economy is twofold.

First, it creates producers out of what would have been previously considered ordinary consumers. This in itself is an incredible thing which holds the promise of economic emancipation for a segment of the population who were previously unable to jump over the barrier to entry and start making money out of their property. Ordinary folks traditionally have had to buy productive goods and watch them depreciate before their eyes while they made limited use of it. The car is probably the best example of this: it’s an expensive piece of machinery that people pay to own, pay to use, pay to upkeep and often pay to store. It’s an expense, not an investment, because it simply can’t generate enough value in the hands of a single individual. Uber and Turo have changed this, and though a website have transformed thousands of cars from consumer goods to capital goods. In the Marxist sense, people now literally own means of productions.

Secondly, and this is closely related to the first point, the sharing economy enables optimal use of resources, which produces economic efficiency. Because economic efficiency means extracting every last bit of value out of every resource, be it goods like cars or consumables like energy, it should be championed. It’s good for the economy, good for the environment, and by lowering the cost of certain goods and services, it’s also a social good. To carry on with the transportation example, it appears self-evident that there are more than enough road-going vehicles currently in North-American to satisfy the entire aggregate demand for transportation, if only we had a means of extracting all this dormant value. The sharing economy is this means.

Information technology has allowed the sharing economy, but it could also greatly profit from it. The turn to cloud-based server infrastructure is great, because it allows for cost-efficient and resilient systems that are easy to scale out, but the true cloud hasn’t yet been achieved. The “cloud” still lives in servers and cabinets which are centralized in server rooms and datacenters, and no amount of local redundancy will rid this model of it’s vulnerabilities to downtime. In essence, it’s really just somebody elses computer(s). Like it or not, AWS still suffers from outages. On the efficiency side of things, having millions of customers on the same ultra-robust infrastructure and enabling nearly automated scale-out makes sense, but in the aggregate, people who want or need their own hardware will continue to build for peak load. This means that a lot of compute, storage and network capacity is wasted while servers wait idly for sufficient solicitation. That’s for servers, but imagine the compute lost in ordinary desktop computers that are always powered on across the world, only to be used to browse Facebook a couple of hours a week.

The next step in achieving in achieving a connected world is decentralizing compute and storage, making the internet truly everything-proof short of a nuclear apocalypse. Here again, as with the transportation problem, it can easily be imagined that this utopia could be achieve if the available compute and storage resources lying dormant could be utilized fully. Turns out, that’s already in the works, at least with storage: enter Storj.

The Storj project uses blockchain technology to build a network of storage nodes which store data in a way that makes it fast, resilient and efficient. Users with spare storage and bandwidth can assign a certain quantity of hard drive space to be shared on the network, which is advertised via DHT, the same technology that enables trackerless bittorrent downloads, and loaned out through smart contracts to people or businesses who need their files hosted. The protocol manages redundancy, and has provisions for determining which blocs (or shards) go where based on parameters like availability, and speed of the hosting node. The network has been shown to be pretty fast, to the point where you can stream media from it. Based on how much data you make available on the network, how much discrete contracts your node services and how well it does it, you get paid in a special crypto token that can be redeemed for other crypto and fiat. At scale, this token can also be used to pay for services, giving it real world value which makes it an interesting digital asset to hold.

The first use case that comes to mind is a Dropbox-like service with lower cost per gigabyte and greater fault-tolerance (and possibly greater speed), but this is not what the Storj team is pursuing, choosing instead to focus on being a backend for other app builders and service providers. This is a smart choice, because the technology opens up incredible opportunities in networks that already exist, but rely on a more traditional server-client architecture. For one, anything that relies on a content distribution network (CDN) could benefit from this technology, in reducing the need for robust server infrastructure to serve content directly, giving redundant access to storage, and possibly reducing the cost of actually getting data from point A to point B. Consider an IP-based TV service provider of the traditional kind, which still puts receivers in it’s customers’ homes. With private Storj network, it could leverage the thousands of unfilled hard drives in it’s receivers to store on-demand content, radically decreasing it’s need for servers and stress on the main trunks of it’s infrastructure. If two neighbourhoods’ worth of receiver hard drives can store all of it’s on-demand content, why overbuild the link from theses two neighborhood to it’s datacenters hundreds of kilometers away? This way of doing things essentially spreads out the load on storage and network over a wider area, making a more efficient use of what resources are already in it.

There have been other tries at distributed storage before. I’ve been involved in using Resilio, formerly known as BitTorrent Sync, in a fairly large production environment to transfer content, and it worked pretty well, but was intended to sync between your own nodes, not necessarily the network at large, making it less interesting in terms of it’s ability to spread the load. Syncthing offers more or the less the same feature-set as Resilio, is open-souce and cross-platform, but suffers the same drawback of being aimed at providing file-sharing between nodes you operate yourself. None of these solutions do anything to utilize dormant resources, let alone remunerate you for contributing to the network. To put it otherwise, existing solutions are still within the traditional “cloud” paradigm of specialized machines doing particular jobs, wheres Storj goes way beyond that into the distributed cloud.

If you have spare storage, and chances are that if you live in the developed world you most probably do, I strongly suggest that you encourage the project and download their app and start sharing. The project currently has several petabytes (a million gigbytes) of available storage, making it probably the biggest experiment in distributed storage to ever have existed. With important commercial agreements having recently kicked in, the product being out of beta, and paid access billing systems now fully functional, the network is surely going to see a spike of activity. You’ll be making money off storage you otherwise wouldn’t use, but you’d also be contributing in technology that will surely power power the internet of tomorrow. The sharing page has everything you need to become a data farmer.

Projets like these show what the sharing economy is really about. It’s not really about sharing in the altruistic sense, it’s about using technology to break down barriers to entry and making markets work better, decentralizing all the things, and empowering consumers by promoting them to the status of producer.

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