Since the storage proofs contain no mechanism to enforce constant uptime and there are also no provisions that require hosts to transfer files back to clients upon request, clients can choose to split up files into pieces which are then encrypted and stored across many hosts, allowing the client to attain high file availability even if the average network reliability is low. Files can be recovered even if all the parts are not available, protecting clients against offline hosts and ensuring that storage providers must compete to provide the best quality of service when returning files to the user. Since clients can request a file at any time, hosts have a direct incentive to maximize uptime in order to collect as many rewards as possible. Contracts do not require hosts to transfer files back to their client when requested. Instead, an out-of-band ecosystem must be created to reward hosts for uploading.
Hosts can also announce themselves to the network, allowing clients to create a database of potential hosts and form contracts with only those they trust. We’re left with a system in which neither clients or hosts are required to trust each other or a third party to complete a storage contract, and although there are certain vulnerabilities in this system, users have no direct benefit to exploit them, rendering this a highly functional p2p cloud storage platform.
It is also worth mentioning that although the platform relies on no central authority to process transactions or contracts, Nebulous Incorporated, the for-profit company that created Sia, charges a 3.9% fee that is allocated to Siafunds holders. Siafunds are held by Nebulous (88%) and by the early crowd-fund backers of Sia (22%). This system is employed as an alternative to premine as a source of income.
Although Sia is currently based on an alternative blockchain with its own native asset, SiaCoin, there are plans to introduce support for a two-way peg with Bitcoin. Learn more about Sia.
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