Cloud storage services like Dropbox and Google Cloud have revolutionized the way we save and share large video and photo files online. They enable everyone to store terabytes of data for a fraction of the cost of a new hard drive, with files that are instantly available from any device.

The catch is that users have to rely on a centralized risk management system, which means they could lose access to their account at any point, share their files with government agencies that may spy on them, or even declare bankruptcy, leaving users to scramble to find another way before their files vanish.

Decentralized file storage networks like Filecoin, Storj, and Arweave are another alternative provided by Web3. Unlike storing your data with a single cloud provider, decentralized file storage methods divide it into tiny packets and store them on pseudonymous computers (nodes) connected to a decentralized network.

Let’s quickly learn about decentralized file storage and its importance in this article.

What is Decentralized File Storage?

Decentralized file storage is a type of storage solution built on a decentralized network powered by blockchain technology rather than depending on a single centralized organization. Instead of being stored on a single server managed by a single authority, data is preserved on multiple nodes in a decentralized network. As a result, there is an increase in security and dependability since the data is shared and protected from errors and other risks.

In addition, users of decentralized storage solutions own and control all of their data instead of depending on a third party to maintain and manage it. Examples of decentralized file storage systems include StorX and InterPlanetary File System (IPFS).

What is IPFS?

A file can be retrieved via the InterPlanetary File System (IPFS), a Peer-to-Peer (P2P) communication protocol. The CID, or unique Content Identifier, is a cryptographic hash that is created and assigned to a file based on its content.

When combined with IPFS Gateways, CIDs enable anybody, anywhere, to access data.

After understanding the basic definition of decentralized file storage, let’s see how they work.

How Does Decentralized File Storage Work?

The decentralized file storage process unfolds in the following steps:

• Upon uploading a file to the IPFS network, the file undergoes fragmentation into multiple pieces, each assigned a unique identifier called an IPFS CID.

• When a user seeks a file, they query the file’s CID through an IPFS URL or IPFS HTTP gateway. This query traverses the network’s distributed hash table, a database mapping CIDs to the node storing the corresponding file.

• The node storing the file receives a retrieval request.

• Upon retrieval, the node adds the file to its cache storage, accessible to other nodes making similar requests.

• Periodically, the node’s cache empties through the IPFS garbage collection process. To prevent file removal, they must be pinned to the network, ensuring permanent storage.

Key Features of Decentralized File Storage

As compared to centralized or cloud storage, the following are the key features of decentralized file storage:

• Reliability: Unlike centralized cloud storage, decentralized Peer-to-Peer (P2P) networks lack a single point of failure. Even if specific nodes experience outages or data corruption, the network continues to operate seamlessly, unaffected by the status of individual nodes.

• Interoperability: Data stored via IPFS enjoys versatile interoperability. Accessible through web browsers using IPFS gateways and the data’s IPFS CID, it requires no authentication or specified access permissions. This fosters extensive functionality across diverse workflows, codebases, SDKs, and tools.

• Redundancy: On the IPFS network, any node can store and retrieve a file upon request. Consequently, multiple nodes can concurrently store a file, ensuring redundancy. However, to guarantee a file’s permanent storage by a node, it must be pinned on the network.

Advantages of Decentralized File Storage

• Decentralized file storage enhances data distribution and storage reliability by ensuring redundancy, safeguarding files in the event of hardware failures, and providing protection against hacking through specific hashes.

• Additionally, it offers a cost-effective solution, reducing expenses on hardware and software. This efficiency is achieved without the need for high-end machines.

• Utilizing Peer-to-Peer (P2P) technology eliminates unnecessary resource requirements, expediting data transfer processes.

• Integrating blockchain-centric systems enhances efficiency, reducing server loads and enabling users and hosts to access data without reliance on servers.

• Crucially, techniques such as sharding divide and encrypt data, fortify it against unauthorized access, and enhance the security and privacy of sensitive information.

Bottomline Thoughts

Decentralized file storage is a transformative shift from centralized alternatives. Utilizing blockchain technology, decentralized storage ensures increased security, reliability, and user control over data. The emergence of solutions like IPFS exemplifies this decentralized approach. With features like reliability, interoperability, and redundancy, decentralized file storage presents a cost-effective and efficient alternative, offering a secure and private means of preserving valuable data in the ever-evolving landscape of digital storage.

Disclaimer: Cryptocurrency is not a legal tender and is currently unregulated. Kindly ensure that you undertake sufficient risk assessment when trading cryptocurrencies as they are often subject to high price volatility. The information provided in this section doesn't represent any investment advice or WazirX's official position. WazirX reserves the right in its sole discretion to amend or change this blog post at any time and for any reasons without prior notice.