DeFi And Decentralized Data Storage Are About To Collide

July
13, 2021

6 min read

This story originally appeared on ValueWalk

The internet we use today is highly centralized by big data companies such as Google, Microsoft, Amazon, and Facebook. These data companies have made big bucks carving up traditional systems into compartmentalized, cloud-based offerings. They have so much control over the data that if any one of these providers has an outage, it’s chaotic at the very least.

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In order to push back against this increasing centralization, developers and platforms need to establish a new system that is easy to set up and compose. Given DeFi success, Decentralized Storage could serve as the cornerstone for a more distributed web.

Decentralized data storage is driving a fundamental shift in the efficiency and economics of large-scale storage systems. By eliminating the centralized control, decentralized data storage allows users to store and share data without relying on third-party storage providers. Decentralization of the data storage sector allows us to mitigate the risk of data failures and outages while increasing security, performance, and privacy.

The Market For Data

Studies suggest that the amount of digital data the world generates doubles every year. Having said that, the vast majority of the storage devices are operating at significantly less than their capacity as these systems continue to suffer from issues such as security, availability, and performance, especially for the users that are far from these systems.

Decentralized data storage addresses these issues by using existing underutilized storage and bandwidth to provide a system that is both cost effective and efficient. Moreover, the surge in data needs across the web requires DeFi solutions to financially empower users to monetize their under-utilized data storage and expand the space.

DeFi has been disrupting the traditional financial sector, and given that the world generated over 44 zettabytes of data by the end of last year, the collision of DeFi and decentralized storage could translate to a whole new ecosystem with incentives and democratization.

Transition From Web 2.0 to Web 3.0 With Decentralized Storage

The web content we consume today is hosted on a very fragile infrastructure that could potentially fail at any moment, making your data inaccessible. Centralization amplifies this effect by creating single points of failure mainly because centralized cloud servers are spread around the world but in a very few locations, isolating billions of users far away from their data and giving too much control to these companies to dictate prices, jurisdictions, and who can use their services.

Instead of a few big players dominating our digital future, the internet needs an open market. Decentralized storage systems connect the world with new storage mechanisms…