What is Siacoin?
Understanding the Sia platform
Things you need to know about Sia, the blockchain solution to cloud storage.
The idea behind Sia is to provide a blockchain infrastructure for an open, decentralised marketplace for cloud storage. With Sia, anybody can rent storage space, host files or participate in the network.
Quick guide: How to buy SC
- Register for an account with a cryptocurrency exchange like CoinSpot.
- Enable 2-factor authentication.
- Verify your account.
- Click “Deposit AUD”.
- Transfer funds into your account.
- Click “Buy/Sell” at the top of the screen.
- Search for the cryptocurrency you want and click “Buy”.
- Enter the amount you want to buy, or the amount of AUD you want to spend.
- Review the transaction details.
- Click “Buy”.
This is our quick guide to just one way to buy SC. Compare some other options in the table below.
What is Sia?
| Icon | Symbol | Initial release date | Algorithm type | Max. supply |
|---|---|---|---|---|
 |
SC | 6 June 2015 | Blake2b, Reed-Solomon | No max |
Cloud storage provides a way for us to store data so that it’s accessible through the Internet and from multiple devices. Most services that offer cloud storage use large, centralised servers to hold files. Instead of keeping all of your data in one place, the Sia network breaks up the data and distributes your files across many different servers, all over the world.
Some of the main features of Sia include:
- Security. All files on the Sia network are cryptographically secure and can only be accessed by the renter. Transactions are managed by the blockchain, which handles contract fulfilment and processes payments between renters and hosts.
- Redundancy. A decentralised storage network spreads lots of small pieces of your data over many different places, rather than keeping everything in one place. What happens if some of the pieces of your data are stored on drives that go offline? Sia uses a redundancy algorithm to ensure that multiple copies of everything are created, to compensate for the potential of hosts logging off. That way, even if some of the nodes that are hosting your files go offline, you will still be able to access all of your information at any given time.
- Price. Even with the built-in redundancy, Sia promises storage fees at a lower rate than traditional cloud storage platforms.
How is Sia different from bitcoin?
Bitcoin was created with a specific goal in mind: to be a digital, peer-to-peer currency. Instead of relying on centralised institutions, like banks, to serve as intermediaries or middlemen for financial transactions, bitcoin created a way for people to send money directly from Person A to Person B. As a currency, bitcoin can be used anywhere that vendors are willing to accept it. Today, you can buy all kinds of things with bitcoin, ranging from a cheeseburger to plane tickets.
Sia applies a similar concept to data storage. Today, the dominant model for cloud storage involves a big company renting out space on large, centralised servers. Instead of relying on a centralised server that is owned by a third party, the Sia network has created a peer-to-peer marketplace for distributed cloud storage. Using Sia, Person A can rent out unused hard drive space directly to Person B.
What is Siacoin?
To handle transactions on the network, Sia uses its own cryptocurrency, called Siacoin (SC). Like bitcoin, Siacoin is a digital currency, but it’s designed specifically for use within the Sia network, in order to buy or sell storage space on the decentralised cloud. If you are renting space to store data, you will pay in Siacoin. Likewise, if you are selling extra space on your hard drive to the Sia network, you will earn Siacoin.
Trading on the Sia platform
You can purchase Siacoin on some popular cryptocurrency exchanges, including Poloniex, Shapeshift, Yunbi, and Bittrex. Sia cannot be purchased directly with fiat currency on most exchanges, so you will need to have bitcoin or another altcoin to exchange.
In order to store Siacoin, you will need to download the Sia client, which includes a digital wallet. When you launch your Sia client for the first time, the user interface will guide you through some steps to sync to the network. You’ll be given a unique address for your wallet, at which point you can safely transfer your coins from an exchange into your Sia wallet.
Will I make money on Sia?
One of the core functions of the Sia platform is to serve as an open marketplace. Anybody with extra space on a device has the potential to earn money by renting unused storage capacity to those that need it. It is also possible to “mine” Siacoin by participating in the network, validating transactions and maintaining the blockchain.
It’s also possible to buy Siacoin without actively participating in the Sia network. If the network grows and the value of the currency goes up, coins purchased on an exchange will increase in value regardless of whether or not you are active on the Sia network. That being said, cryptocurrencies are known for being volatile and it’s important to understand the potential risks involved when it comes to purchasing any digital currency.
What to watch out for
- Hardware. One of the big questions concerning the future of data storage has to do with hardware. As technology continues to advance, and the demand for data storage grows, we may see developments in hardware that allow for storing large amounts of data with a trivially small footprint. The potential for hardware to outpace software in this regard poses one potential risk for Sia, although at this point there is some debate as to whether or not this is a valid concern.
- Not for the beginner. While the Sia client is built with a simple user interface, it’s not as intuitive as many familiar applications. It can take up to fifteen minutes for your digital wallet to sync with the network for the first time. The process of renting space or participating as a host on the Sia network does require some technical steps and may be difficult for some users.
- It’s a work in progress. Sia is a promising platform, but it’s important to keep in mind that it’s still under development. The project is currently live and active, but many features have not yet been implemented and bugs are not uncommon at this stage.
What’s next for Sia?
An ambitious project with a long-term vision, Sia is still in the early phases of development and implementation. Upcoming updates to the Sia platform should include:
- Improvements to the user interface
- Easy peer-to-peer file sharing between users on the Sia network
- Faster contract formation
- Video streaming
- The ability to recover backups of older versions of files from hosts
- Flexible settings and preferences for performance and pricing
- The ability to blacklist undesirable hosts
- Improved support for diverse file sizes
- The ability to view statistics on host uptime
Frequently asked questions
Image sources: Shutterstock
