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How blockchain іs disrupting data storage and handling

How blockchain іs disrupting data storage and handling

December 12, 2019
by Orest Hudziy

How Data Management Can Benefit from Blockchain Data Storage

Problems such as data breaches, skyrocketing storage costs, lack of ownership, and censorship have continually plagued centralized data storage. With technological advancements and increased awareness, traditional data storage will soon pave the way to decentralized data storage and blockchain.

And it’s not just the financial sector that is interested in this new digital storage tech but also enterprises in multiple industries, and government agencies. As data becomes increasingly valuable, more individuals and organizations will turn to decentralized cloud storage technology for better security.

In this article, we’ll tell you why you should switch to decentralized data storage, how decentralized storage and blockchain work, and the advantages of using blockchain.

Why Use a Decentralized System to Store Your Data?

Rather than a single entity or company storing all the data, a decentralized network involves storing data in several locations by users who receive incentives (tokens) to keep data accessible. Individuals host the servers, and smart contracts are used to guarantee honesty. Some reasons why enterprises should use decentralized data networks instead of centralized systems are:

To improve their data security and privacy

According to a survey by PWC, 85% of respondents cited privacy risks and cybersecurity as the most significant data risk factors. Decentralized networks employ a technique known as sharding to improve security, which means files are broken down into smaller parts and stored across different computers/ nodes. As such, no one stores the entire document. Moreover, files are encrypted automatically, and only the owner holds the encryption key.

To bring down storage costs

There is no cost of infrastructure when it comes to decentralized storage. This system of data storage utilizes marketplaces that are already there. Further, the high competition among nodes has ensured fairer market prices.

To eliminate the risk of file interference or loss

Data stored in decentralized networks is immutable. This simply means that original copies of your data are stored in multiple places with no one party having control over it. It, therefore, difficult for one person to make important alterations to the data. It also ensures a lesser risk of file loss.

To store large amounts of data

In 2018, IDC released a report predicting that global data will grow to 175 zettabytes by 2025, up from 33 zettabytes. Therefore, there will be a higher demand for large storage at an affordable rate. Decentralized networks have massive storage marketplaces that can be scaled up when needed or down when not in use, thus making them highly flexible and convenient.

To transfer or retrieve documents faster

In a decentralized network, data is handled by nearby peers and utilizes local bandwidth, thereby making data transfer much faster than in centralized storage.

Combining Blockchain and Decentralized Data Management

Blockchain data storage is similar to a decentralized storage network in that it also employs a distributed storage system and, as such, is secure, private, and fast. One way that enterprises can use blockchain is in transferring documents from different locations securely. However, blockchain works best when used to store transactional information.

Though blockchain creates a trustworthy system of data storage, it can only store small amounts of transactional data. Large files can’t be stored in blocks. A decentralized data network is needed to solve this shortcoming. Developers in blockchain are, therefore, making use of storage marketplaces to build blockchain apps that can store and process large amounts of data.

Benefits of Blockchain Data Storage

Why should your business utilize blockchain in storing and managing your data? Here are some benefits you stand to gain:


Block ledgers are more transparent and easier to verify than a cloud storage provider.

Cheaper than cloud solutions

Storing data in blockchain cost a fraction of the price that traditional cloud storage providers. At about 8% of the cost per terabyte of what Amazon S3 charges, blockchain offers massive cost reduction.

Verifiable and tamper-resistant

Block technology eliminates the need to have a central or third-party authority as transactions or verified and synchronized automatically. Since transactional data is stored in multiple places, this system is also relatively tamper-proof.

Zero purchase equipment maintenance budget

No storage equipment is needed when you want to store your data in a blockchain. Moreover, you will not need to maintain the infrastructure or oversee the process.

Availability of redundant copies

Data stored in a blockchain is segmented into shards and replicas of each shard are created and distributed to different nodes. Therefore, each file you store on the blockchain will have several other security copies.

Summing it Up

Decentralized data storage and cloud computing systems carry some level of risk since they involve third parties. However, with decentralized blockchain storage, this risk is easily mitigated through sharding and automated encryption. With the increasing interest in decentralized storage technology and how it can be combined with blockchain, the existing cloud storage industry might become obsolete within the next few years.

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