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Blockchain and the promise of cooperative cloud storage

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Blockchain technology allows distributed retention of encrypted data and is at the heart of cooperative cloud storage

Given that crypto-currency bitcoin is the poster-child for blockchain technology, it’s no surprise that much of the blockchain fuss – and, indeed, much of the actual blockchain work – is focused on payment systems and related areas such as invoicing and tax reporting.

Yet blockchain as a technology is far more widely applicable than this. At heart, it is simply a cryptographic method of distributing data and recording transactions.

Blockchain’s power lies not only its heavy encryption, but also its distribution across a chain of computers, rendering it even harder (and prohibitively expensive) to attack.

It is a distributed database on steroids: a self-verifying sequential storage scheme that can be used to immutably record transactions, ownership or identity, to negotiate and enforce contracts, and much more besides.

It has accordingly been used within a number of replicated databases and similar projects.

Tamper-proof data

For example, backup and storage specialist Acronis has used it to prove that stored data has not been tampered with – in effect creating a verifiable backup.

To make blockchain practical from a cost perspective, the Acronis technology stores only hashes of its data blocks. It could store the whole thing, according to Acronis CEO Serguei Beloussov, but that would be more expensive, and in any case the encrypted and distributed hashes are enough to verify the data blocks.


Blockchain does not just store data in a distributed and encrypted form – there are, after all, other schemes that can also do that – it does so via a sequential chain in which each block contains a cryptographic hash of the block before it in the chain. This links the blocks, creating a decentralised transaction ledger.

This ledger can be visible and public, thereby providing a transparent view into the historical sequence of facts and events, or it can be permissioned, as preferred by financial organisations for privacy reasons.

Whether public or private, the ledger allows the stored data to be verified as consistent, and because it is decentralised it provides resistance to external attacks and malicious actors within the system.

Significantly, a blockchain can also still generate and replicate data despite only intermittent network connectivity. As for security, hackers’ reported theft of bitcoins is more to do with their owners’ inadequate digital wallet security than with any weakness in the blockchain technology.

No more middlemen

For many observers, the biggest change that blockchains are likely to bring is disintermediation. That is because a well-designed and publicly accessible blockchain can replace many of the functions that we currently rely on intermediaries for, such as providing a trustworthy trading environment, ensuring contract compliance, guarding against fraud and handling financial transactions.

And, it turns out, that kind of functionality can even be turned to the provision of data storage.

Storj’s cloud storage

Storj Labs uses blockchains to create a decentralised cloud system using spare disk space allocated by a community of “farmers” who receive rent in Storj’s native cryptocurrency. Stored files are “shredded” and the shards encrypted and distributed across the available storage – this is where such blockchain features as a transaction ledger, public/private key encryption, and cryptographic hash functions come in.

For Storj Labs, blockchain elegantly solves many of the challenges around putting your files on someone else’s home or office computer or NAS device. In particular, the shards are protected against intrusion, and three copies of each are stored to provide redundancy in case a remote system goes offline.

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