Initially, it is worth mentioning what the Sia service itself is. This is the platform on which data is stored and is a decentralized network. At the moment, it continues to be actively developed, but, nevertheless, a huge number of users use this service, providing space on the hard drives of their personal computer, building this whole network.
The owners of this service rent the place just from the owners of Siacoin – cryptocurrency, which is used by this service, which creates an entire system. The lease operation is implemented using so-called smart contracts. They are stored in the Sia service blockchain, and their function is to transfer payments to the host automatically at the end of the designated period of time during which the file was stored. As a result, payment in the form of “coins” of Siacoin cryptocurrency occurs only if the file has not been lost by the host.
Thanks to decentralization, the transaction time is very short, and the system itself is safe and reliable. Any user can rent out a place to store data, receiving a reward.
History of occurrence
The development of the Sia system, including cryptocurrencies, has been going on for quite some time, and the project received popular recognition in 2015, then the history of Siacoin began. The unusual technology and concept have generated interest in both users and investors. The creator of Siacoin is David Warwick. The appearance of an idea from the developer and the project itself is covered in many secrets, there is not enough information about the development and development.
Features and principle of operation
The basis of the Sia service is the creation of a contract for the storage of the downloaded file. The contract includes, among other things, a fee, as well as a penalty for non-compliance with the contract, which will be written off if the file is deleted in the Siacoin cryptocurrency. At the end of the required period, the host must prove the existence of the file, and in the positive case, it receives a reward.
The system has support for payment channels and bilateral contracts. This fact is crucial in ensuring the elimination of unreliable money transfers without confirmation of compliance with the contract. Also, all money transfers are instant and, moreover, non-refundable, which reduces the risk of fraud, not only from lessors but also those who rent hard disk space.
Reliability of storage is also achieved by dividing the file into a huge number of fragments, some of them may not be used at all to recreate the original file, which excludes the possibility of reading it by a third party. But for this, three times more resources are used than necessary, which may be impractical.
But in Sia, the main priority is security, because the waste of resources is justified in this case. So, not only files but even their fragments are encrypted, allowing you to observe the anonymity and confidentiality of data.
Decentralization also has a positive effect on the waiting time for a transaction, which attracts investors. And this, in turn, increases the capitalization of Siacoin. Thus, with the growth of the network, it becomes more efficient, which entails an increase in the amount invested in the development of the entire service.
Sia is even more attractive for ordinary users because the threshold of entry is very low. The reward can be received by anyone who can provide a place to store data, and this, in turn, reduces the cost of cloud storage.
Difference between Siacoin and Bitcoin
Cryptocurrency Siakoin is fundamentally different from Bitcoin. This is primarily due to the Sia system itself. Mining Siacoin is simply absent in its usual form, which creates one of the differences from the popular digital currency.
Also, Siakoin is used as an addition to the main system. Blocks are still mined, but according to a system of data storage contracts. The reward for the extraction of the very first block is three hundred thousand “coins”, the reward for subsequent blocks will be reduced by one “coin” every time, up to thirty thousand. After that, all blocks will bring this fixed reward.
Digital currency is used to support the functionality and various features of Sia because all contracts and payments require the use of this cryptocurrency. Thus, the Siacoin exchange rate is directly dependent on the volume of stored files in this system.
Also, 4% of all payments go to the development of the system, which allows it to maintain its functioning, as well as find new ways for progress. This is important for this unique project, which is clearly different from other virtual currencies, including the world-famous Bitcoin.
The blockchain algorithm is also excellent. It all depends on smart contracts that work on its basis. As mentioned above, they provide reliability by proving the presence of a file using cryptographic data, which entails payment of the contract.
It also uses a certain set of codes that are responsible for the deletion, which gives guarantees for the continuous operation of files even in unforeseen cases. Such cases include host unreliability or failure.
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