In the information explosion era, data storage is important to each of us. From punch cards, floppy disks, hard disks, and finally to centralized cloud storage services, humans have never stopped creating a more convenient and efficient data storage solution. It’s only natural to assume that a cheaper, faster, and more private service will appear in the future. In this article, I will start by analyzing the problems in today’s storage market, then show the charm, and solution, that decentralized storage platforms can offer.
How Big Is the Storage Market?
When we talk about a particular market, size and trends are two of the most essential points. Based on the trends in the above chart, as of 2020, the total shipments of hard drives could reach 1120 EB (exabyte) and will continue to rise steadily. But what are the kind of problems that exist in such a huge market?
What Is the Biggest Problem in the Current Market?
Here, I would like to introduce the current storage industry. Storage is divided into two parts: enterprise storage and personal storage. The best examples of enterprise storage are AWS S3 and Alibaba Cloud’s OSS. For personal storage, I believe most of you are familiar with network disks such as Microsoft’s OneDrive, Apple’s iCloud, Google’s Google Drive, and a third-party company like Dropbox.
So far, I have outlined the existing technical solutions in the storage industry and whether it is enterprise services or personal services. But these storage systems are a centralized solution. Centralized storage is where merchants build their own data centers, buy bandwidth, purchase machines, deploy software, and eventually build a complete service product.
Although centralized storage is currently the most popular solution, it does include a few problems.
- Because of the central server of the network, centralized storage platforms have high-security costs and can be easily attacked. As we all know, for hackers, as long as they break through to the central server, they can access all our data and can even tamper it.
- For operators with insufficient strength, there is a risk of terminating the service at any time. In 2013, cloud service provider Nirvanix shut down and filed for bankruptcy. Furthermore, they allowed only two weeks for customers to retrieve or transfer their data from their servers.
- Individuals no longer own personal data. Conversely, the companies offering storage capabilities possess all your data. Some platforms use this data as a training data sample for AI deep learning, which in turn provide benefits in other areas. This data has a specific commercial value after a disguised analysis. Merchants can use this data to analyze the customers’ purchasing habits in order to accurately guide their behavior, and then ultimately to induce customers to purchase specific goods to generate greater revenue. Therefore, as long as the data is placed in a centralized place, the users’ data rights cannot be guaranteed.
- There is a risk that personal privacy data will be investigated. First of all, I believe that the investigation of illegal data is conducive to social and economic stability. However, for investigators, they may not be sure which data is illegal and which data isn’t. The only solution is to check all the data which is bound to affect the legitimate privacy of users. This means your private data can be seen and even possibility leaked.
- Bandwidth transmission costs are expensive. Let me emphasize that I am referring to bandwidth, not storage. Both uploading data or downloading data needs to consume bandwidth. Therefore bandwidth cannot be ignored as it is integral and is more expensive than storage. Centralized storage services, to ensure that users everywhere have good experiences, will deploy data centers as the backbone of the network. However, the backbone of a network will always be the most expensive, no matter the country it is deployed in.
Why We Decided To Build A Decentralized Storage Platform
Decentralized storage does not mean building data centers, buying bandwidth, purchasing machines, and hard drives. Instead, it creates a set of fair, effective, and transparent rules to mobilize the storage capacity of the world as much as possible using resources that effectively connect the Internet. Through a great unified distributed software system, all resources are effectively linked to provide a stable service. This is in line with the essence of P2P technology, which is to establish a stable service on a relatively unstable infrastructure through the law of probability.
The Advantages of Decentralized Storage?
Low Transmission Costs
In order to maintain the user experience in multiple places, centralized storage can only deploy the service on backbone nodes with high bandwidth. On the other hand, decentralized storage can make full use of cheap metropolitan area network bandwidth. Even idle home bandwidth can be employed. Together it can greatly reduce the cost of bandwidth. For more details, please read my previous article, “Why Decentralized Storage Can Achieve Lower Prices.”
The security mechanisms between decentralized networks and centralized networks are different. Centralized network security relies heavily on the credit of centralized operators, and the core storage mechanism is closed and not open-sourced. The operators of centralized storage service have the rights to view, modify, and delete the data of users. On the other hand, the security mechanism of decentralized storage is determined by mathematics, cryptography, and the network mechanism. The code of the core storage mechanism in a decentralized platform is open source and transparent. Instead it is the user’s private key thatdetermines the viewing, modification, and deletion of data. As long as the private key is not compromised, data is secure. Just like Bitcoin, all funds are safe so long as the private key is not stolen.
For decentralized storage users, there is no need to worry about the possibility of a total shutdown of the servers. This is because decentralized storage belongs to the user and the community, not to a single company. Specifically, as long as the network can continue to run, it will eventually appear in the form of something like Bitcoin — something that is fully open-sourced. Since there is no central server, as long as people are willing to deploy nodes, the entire network will automatically connect all nodes to provide a valuable service network.
Because of the above considerations, my partner Bill Yao and I have created PPIO, a decentralized storage and delivery platform for developers to make data cheaper, faster, and more private. No matter if this is your first time hearing about our project or you are already familiar with what we do, I highly suggest you have a look at our official website.
PPIO is a platform, but the question should be asked, what is a platform? A platform, in this case, has at least two roles. One is supply, the other is demand. A platform should make a match between the two roles to ultimately form a transaction. Furthermore, whether the parties on the platform can grow orderly and rapidly determines the value of the platform.
Who Are the Important Stakeholders on the PPIO Decentralized Storage Platform?
There are three types of roles on the PPIO decentralized storage platform:
- The first one is users; as the demand side of the platform, they use storage services.
- The second one is the miners, which are storage nodes. As the supply side of the platform, they provide storage services and bandwidth services for uploading and downloading.
- The third one is the service node. This is because the entire platform needs specific nodes to provide specialized and organizational services, such as index retrieval, supervision and certification, block generation, and the execution of the oracle machine.
When it comes to launching the PPIO platform, how should it start? Most blockchain projects are initiated by pulling the supply side first. Below I will focus on how we will cold start the PPIO platform. For a moment, consider whether each of the three types of roles needs to be manipulated in various ways. Or if it‘s better, in the early stages, to pull the demand side or the supply side first?
How Does the PPIO Cold Start Process Work?
Since it is a platform, there is a strategic problem of how to start it in the early stages. Is the early market suitable for unilateral launch, bilateral launch, or a multilateral launch? This is a fascinating question; let’s do an analysis.
First of all, the service node does not have a lot of demand in the beginning stages and can deploy the server itself to assume the role of the service node. After the user and the storage node are measured, and the software program is verified to be stable, it can be gradually opened to third parties, and everyone can jointly deploy service nodes. This is also the process of the strong center first, then the weak center, and finally, the decenter stage. We cover this in greater detail in the article “Why Did I Design PPIO To Take Over Over Three Different Phases?” Therefore, it is not necessary to focus on or to pull the service node during the early operation period.
Let’s move to the user nodes and storage nodes. The essence of this is supply and demand. We can take cues from other platforms to learn how to do this. For example, YouTube, as the premier video sharing platform needed to rely on the supply side first; after all, without content, there would be no demand. As more and more users migrated to the platform and began to share videos and create their own, the demand side slowly caught up to the supply.
Conversely, Netflix is an example of a platform that focused on demand first. Netflix had its humble origins as an online DVD rental service. This satisfied, at the time, the need for DVDs by people who did not have the time to go to brick and mortar video rental shops like Blockbuster.
For PPIO, the products sold are essentially storage and bandwidth. Apart from geographical factors, all other products are standardized products, without any creativity or special parts. Therefore, we must adopt a strategy where we unilaterally pull from the demand side, meaning we first focus on the development and acquisition of users.
The reason behind this is not difficult to understand. If we pull the supply side, but the demand is insufficient, miners will soon find that they cannot get a stable and continuous income from the platform. Therefore they will no longer offer their services and will leave early. If on the other hand, the demand side is pulled at an early stage, the number of users will continue to grow if we put in the effort to manage, look after, and benefit these users. After a large number of users has been accumulated, the usage of the entire PPIO platform will increase. Miners will continue to provide more and more stable services to gain more stable returns. Once that stage is achieved, miners will be able to provide services in the PPIO platform without any downtime or mass departure. In the long run, the supply side will become more and more stable, and it will stimulate the demand side accordingly. Eventually, the process of successfully completing the cold start will be achieved. For a detailed breakdown, please read the article “Should PPIO Pull The Supply First, or Should Demand Be Pulled First?”
Since it is a platform, in addition to the early pull of the demand side to complete the cold start, it is necessary to establish an effective market mechanism, namely the storage rental market and the bandwidth leasing market. In other words, picking the most suitable choice between the quoted price of users and miners and eventually conducting the transaction that benefits everyone. In this situation, users are eager for a lower price, while miners hope that the price of the service will continue to grow. Ultimately, we hope to achieve a balance between buyers (users) and sellers (miners) by geographic market.
Now imagine that the PPIO platform has passed the cold start process and achieved a certain scale. Will PPIO have the same problems that other Internet platforms have encountered?
Which Difficulties May PPIO Encounter?
First of all, let me talk about some issues other Internet platforms may encounter when they grow up. We can look at Amazon and other eCommerce channels as an example.
- Ipsilateral Competition Problem: There is a fierce competition between sellers for products in the same category. Therefore, once a category of products has been established, it is difficult for new sellers to have success.
- The Paradox of Choice: When consumers face an overwhelming amount of choices, they often feel anxiety and have trouble making a final decision.
- Service Quality Reduction Problem: When there are more and more available goods, there is often a race to the bottom in terms of offering the best price. In some marketplaces, this can result in a decline in the quality of goods available.
Here’s How PPIO Will Solve These Issues
Ipsilateral Competition Problem
The primary consideration is fierce competition between storage nodes. The result is that some storage cannot be fully used because there are other lower-priced, more stable storage nodes in the PPIO network that provide a better service. Our algorithm applied in the same geographical area, the same service commitment (collateral), and the same physical structure of the hard disk material will prioritize the lower-cost, more stable storage nodes. I think this algorithm design is correct because we provide standardized services on the supply side. It is precisely because the algorithm gives priority to lower prices and more stable storage nodes that these same nodes will receive a higher demand. Hence, it can help us establish effective competition on the supply side, which makes storage nodes more stable and cheaper. Think of the situation with Bitcoin today. Only professional miners can get very cheap electricity; for the average person, they will almost certainly lose money when trying to mine Bitcoin. A relatively fair economic mechanism drives this. If you want to get orders on the PPIO network in the future, you must find a cheaper network, storage, and electricity and offer the best service possible.
The Paradox of Choice
The Paradox of Choice generally occurs on the user side. This means that as the supply side increases, more and more storage nodes will be available to users. This, in turn, means that some users will not know which storage nodes they should choose. We have attempted to solve this issue by letting the algorithm solve the selection mechanism problem. Different algorithms can make different selection logic; however, the essence of a decentralized storage platform is to build a standardized service. From a technological perspective, we recommend using a stock transaction matching mechanism, à la trading securities. In the case of geographical, service commitment, and physical structure of the storage being the same, the price will be a first choice factor, while past service quality will be a second choice factor. This allows users to quickly make a choice, find a storage node, and automatically sign a storage contract (i.e., a deal with the storage nodes). In short, PPIO solves the problem of the Paradox of Choice by technical means.
Service Quality Reduction Problem
I mentioned before that due to the supply-side competition, the storage price of the PPIO platform would be driven lower and lower. Therefore, it is worth considering whether the storage node — by using a cheap hard disk or a storage mechanism of questionable quality — will reduce the quality of the overall storage experience for other users? To prevent this, we have designed our token economy mechanism. All PPIO transaction and service execution details will eventually be written to the blockchain after passing a certification. We have designed the mechanism so storage nodes will be punished economically if they are not immediately proven on the blockchain. For the storage node, if a bad hard disk or network is employed, then that node will undoubtedly encounter problems when providing the service. That storage node will then be punished for problems, and any upfront deposit will not be returned. For storage nodes like this, it will lose more than it will gain so they will need to find their own way to ensure the quality of the service. In short, PPIO solves this problem through an economic mechanism.
We hope that the feasibility of decentralized storage as a valuable business platform is now clearer. Given that centralized storage is the current mainstream storage service, we believe decentralized storage will surpass the current system to become one of the most valuable business platforms in the future. Are you ready to welcome the future of storage?