Sia is a project which offers a private, decentralized and secure cloud-based storage platform hosted on the blockchain for a fraction of the price of other popular storage platforms such as Dropbox, Amazon S3, and Google Drive.
Sia, as a concept, was first dreamt up at HackMIT, an annual student-run hackathon, back in 2013 and was officially launched in June of 2015; it is now backed by Boston-based firm Nebulous Inc., whose self-proclaimed mantra is: ‘Re-decentralizing the Internet’.
The basic idea is that instead of renting storage from a central bank of servers, as is the norm with traditional cloud-based platforms, peers on the Sia platform rent space from each other via its ‘distributed cloud storage platform’.
Sia employs erasure coding (distributing encrypted fragments of data redundantly across the network) and an independent blockchain with tokens called ‘Siacoins’ to support the network.
Unlike most new coins, Sia’s launch wasn’t preceded by an ICO or pre-mining; instead, Sia began life when its genesis block was mined. Thanks to prominent investors such as Procyon Ventures, Raptor Group, Fenbushi Capital, along with angel investors like Xiaolai Li, the Sia team managed to raise over $1.25 million in funding without an ICO.
Who’s Behind It?
So, Sia is backed by the Nebulous development team which contains a core team of five industry people all determined to see Sia succeed. Nebulous’ focus is reliable, decentralized infrastructure to help bring forward the future and Sia is the primary project of the Nebulous team.
David Vorick is cofounder and CEO at Nebulous. He’s a talented developer with a degree in computer science who spent some time as a software developer before taking the reins at Nebulous where he is an instrumental component in the management of the Sia project.
Todd Miltenberger, founder of Nebulous, is an American venture capitalist, entrepreneur and investment banker for emerging growth companies. Todd currently serves as Associate for the Private Markets Group at Stifel Nicolaus, dedicating his time to the group’s investment banking and Vectis II fund management activities. Todd founded Nebulous in 2009 as a niche consulting business.
Luke Champine is co-founder at Nebulous where he specialises in writing software to re-decentralize the internet. He studied Computer & Systems Engineering for 3 years, before him and a friend were, in his words ‘bitten by the startup bug’ and went on to cofound Nebulous. He’s previously worked at Akamai and Kronos, respectively.
Other team members include Jae Heller, who takes care of business development, and Drew Volpe, Nebulous’ board observer. Heller is a forward-thinking entrepreneur and marketing strategist with an appetite to disrupt, create and reinvent products and experiences which transform industries, engage consumers, and enable positive change. Volpe is an investor, entrepreneur, and technologist with a strong background in search, machine learning, sensors, and mobile technologies.
Why Could this be Big ?
Sia has the potential to disrupt a multibillion dollar industry, namely the storage of the world’s files in a way that is more private, more secure, and more cost effective than ever before. With no need for a central bank of severs on which to store data, Sia could absolutely revolutionize the cloud storage industry by utilizing blockchain technology to allow for peer-to-peer file storage.
How it works is hosts and renters engage in file contracts which is essentially an agreement between the storage provider and the consumer; this takes place before any storage is provided. The consumer pays the Siacoins upfront to the blockchain, which acts as an escrow service, with the previous contract serving as the rules for arbitration. If the contract is met and the storage provider submits a proof of storage, the storage provider is compensated and, if not, the coins are returned to the renter.
Sia’s site states: ‘as of January 2016, storage is about $2.25/TB/month with 6x redundancy’, though actual prices differ slightly. Siapulse.com claims to track market rates and price conversions. The SiaExplorer from the official Sia domain also caters for blockchain exploration, where some basic metadata regarding contracts and transactions can be viewed.
If, in practice, Sia manages to get even close to $2.25/TB and the Nebulous team are able to effectively market their solution, it could spell big trouble for the likes of Google, Amazon and Dropbox.
As previously mentioned, The Sia team chose not to hold an ICO. Instead, they managed to raise enough funds from various independent investors and the accompanying Siacoins were launched simply with the mining of the genesis block. This is very unusual in the cryptocurrency world but has so far seemed to work out for Sia. The Sia team managed to raise over $1.25 million in funding without an ICO.
The supply limit of Siacoins, which are used as a means of payment between hosts and renters, is somewhat unique; there are an infinite number of Siacoins available to be mined.
To start with, developers mined the first 100 blocks and the reward for the first block was 300,000 Siacoins. After the first block, the Siacoin reward has and will continue to exponentially decrease by one unit for subsequent blocks until the block rewards are reduced to 30,000 Siacoins; after that, for every block mined, 30,000 Siacoins will be released.
Although Sia did not hold an ICO, they did crowd fund with the sale of “Siafunds” which are a secondary cryptocurrency and pay out 3.9% of all successful storage contract payouts to the holders of the Siafunds. 10,000 Siafunds were issued in total, and about 1,000 were sold in the crowd-sale and the rest held by the development team. It is no longer possible to purchase Siafunds unless you obtain one directly from a holder, they are occasionally offered for sale on their subreddit or Slack trading channel.
Mining & Obelisk ASICS
It is currently possible to mine Sia using a GPU from Nvidia or AMD although the profitability of doing so has dropped quite a bit, it is also popular to dual mine Ethereum and Sia together using the Claymore Dual Miner. The most popular mining pool is SiaMining and there is a comprehensive guide here on how to get started with it.
I recent announcement from the Sia team, was the introduction of Obelisk, their own custom ASIC miner for Siacoin which is 100 times more powerful than mining with a GPU, this effectively will put the end to GPU mining when it ships out in June 2018. So far 1530 miners have been sold from a total of 4000. They are available to preorder for a price of $2500.
- 2013 – Sia, as a concept, is first dreamt up at HackMIT, an annual student-run hackathon
- 2015 – Siacoin is officially launched without an ICO, having generated $1.25 million in funding from independent investors
- 2017 – As of July 1, Siacoin is trading at $0.008427 a coin – up tens of thousands of percentage points since its launch
There is currently no lite wallet available for storing your Sia Coins so you have to download the Sia UI client which will synchronize the blockchain on your local machine. This took me many hours to download when I first set it up so be warned, you may have to leave your computer on all day to get the full blockchain.
You can create your wallet in the app, you will be given a seed which is a list of words – store this somewhere safe as this is how your wallet is backed up, you will need it if you need to recreate your wallet.
Once you have your wallet synced, you can begin sending and receiving Siacoins and also become a host or host your own files on the network.
Siacoin looks like it could be an interesting project. Peer-to-peer storage could very well be the future of file storage as our respective cyber footprints grow larger with each passing year, steadily filling up the servers at Amazon, Google and the like.
From an investing point of view, Sia has done very well over the last six months and has proven itself to be a resilient and often bullish asset. A quick glance at the relevant graphs regarding the coin’s trajectory, and you’ll get an idea of the incredible journey Sia has been on for the last two years or so since its launch.
Having said that, one thing which is causing the Nebulous development team concern is, if you can believe it, the speed at which the humble Siacoin has surged in value. The reason for this is that the very concept of Sia relies on Siacoins being used as a payment for services provided, not, as many seem to believe, as some sort of investment vehicle. Only time will tell whether the team are able to effectively stabilize the currency, thus rendering it fit for purpose which in turn could deter potential investors in the coin.
Another area for concern is the competitors which are now entering this market, for example Storj which just held a successful ICO where they raised $30mm in tokens and have partnered with the extremely popular FTP program Filezilla to incorporate their product directly into it’s interface.
It is estimated that the cloud storage market could be worth $74billion by 2021, if Sia could go some way to capturing a part of this market from the established companies such as Dropbox, Microsoft and Google then it could prove to be a very lucrative investment.