Decentralized File Storage and Sharing on the Blockchain: A Covalent Blog

We’re extremely excited to bring you the first in a series of blogs from the various members of the Victory Square family.  We’re kicking off our series of insights from the minds behind our subsidiaries with a very special report from the research arm of our friends at Covalent.

This is a portion of what you’ll get in the reports provided by the newly launched research arm of our friends at Covalent. To learn more about what Covalent does and purchase their full array of reports and webinars please go to



Without data, it’s difficult to know what to pay attention to and what to ignore. With our data backed research, we bring a strategic advantage point to you that has never been done before. This understanding in transparency is critical for the mass market adoption of crypto. Our Research Methodology is based on the AUDIT method, an acronym that stands for Actionable, Understandable, Data-driven, In-depth, Timely information. To learn more about the AUDIT method, take a look at the accompanying material.

Some of the featured platforms on this Webinar are Filecoin, Siacoin, Maidsafe, Storj, and Bluzelle. We’re only focused on Post-ICO companies, and therefore, these companies and tokens are actively trading and being used on the Blockchain. The first question you must ask is why pay attention to the decentralized file storage and sharing space?

Cloud file storage platforms are transformative because instead of using a local computer storage to store files and photos which at times could take up a gigabyte of space, you use third-party sellers from Dropbox, Box, Google Drive, and Microsoft One Drive.

The Cloud Storage Market is estimated to grow to $74 billion by 2021 and it’s a massive space. What defines the decentralized file storage and sharing space? We define the space with two key attributes. First is the peer-to-peer nature of the service. The fact that you can rent your unused storage on a decentralized platform to offset your cost is groundbreaking. Peer-to-peer is one of the major pillars for the decentralized space. This attribute allows for increased download and upload speeds because every file being downloaded is from a number of hosts across the network. Peer-to-peer has this interesting attribute where the storage costs decrease as the number of peers in the network increases.

The second key attribute is the use of data encryption. Centralized platforms offer limited data encryption which can often lead to security breaches. The key point here is that your private key used to encrypt your data is held with a decentralized storage provider. Encryption plays a huge role in the excellent security and privacy that decentralized platforms have.

Data files are fully encrypted and broken into shards before storing across different hosts on the network. Only the user who is uploading the data has access to it using their private encryption key. This is unparalleled data security that centralized platforms can never match.

The next topic, we’re going to explore is what end-users and the market care about. At Covalent, we have assessed the storage platforms according to the five critical capabilities. Decentralized storage platforms are in the nascent stage and are often not targeting enterprise use cases yet. The first need is data security. End-users care that no one except themselves has access to their files.

The second need is system speed. The service needs to offer fast upload and download speeds. The third is consumers are very conscious about pricing. As more and more data is being stored, end-users care deeply about costs. The fourth key requirement is data privacy. It’s important to make the distinction between data security and data privacy.

Imagine a window. There are two scenarios. First, you could have metal bars that prevent objects from entering the window. That’s security, people can still look through the window and offers no privacy. Secondly, you can drape the blinds across the window that offers privacy, but no security because you can always throw something in. Therefore the combination of drapes plus metal bars offers the best privacy and security. End-users definitely care about privacy.

The final point is integration. End-users care that their storage provider integrates with your existing platforms like Slack and Autodesk.


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