The rise of cloud computing launched a revolution in how people and businesses create, access and transfer their data giving rise to demand for easy-to-use, online storage and synchronization solutions. Dropbox is now valued at approximately $10 billion, while Box celebrated a successful IPO last month. But keeping sensitive data in one place is leaving users vulnerable to cyber-attacks which are predicted to become more commonplace. While existing players in the cloud storage industry scramble to improve security measures and reassure nervous customers, startups like Storj are opting to offer peer-to-peer (p2p) cloud storage networks.
Southern startup Storj launched in earnest last year after unanimously winning first place at the Texas Bitcoin Conference. The company describes itself as a peer-to-peer cloud storage network.
“Standard cloud services store all of the data for the consumers on centralized servers: encryption is rarely done on the client end,” says Storj cofounder Shawn Wilkinson. “This results in the company holding the keys to the user’s data. With increasing frequency, these companies lose or have stolen our private user data.”
All things being equal, Storj’s service is based on blockchain technology, the same technology that powers bitcoin. Rather than storing files on a centralized server, the Storj network leverages spare room on individual users’ hard drives. When a user uploads a file, Storj’s software encrypts it, “shreds” it and distributes across the network until the user needs to access it again. Users can buy or sell additional storage from each other through the network and earn rewards by “renting out” hard drive space for others to use.
The company has also place an emphasis on user adoption. Storj utilizes a simple drag-and-drop interface and is designed to appeal to a wide range of end-users, ranging from casual customers to those at the enterprise level.
Wilkinson says that Storj will eventually partner with corporations to build custom software solutions in akin to Red Hat’s model to generate more revenue. For now, though, he says the focus has been on developing the platform and baseline protocols. To help narrow down their focus, Wilkinson adds that Storj has been talking with other leaders in the industry, like Dropbox’s Aston Motes, and notes that some of its capabilities are still in beta.
“There are many ways for us to make money: it depends on the use case and the client,” he says. “But really we’re just trying to build a foundation and then find use cases that we could help bridge that gap so we can get some value out of that for ourselves.”
To date, the startup has been operating on proceeds from a successful crowdfunding campaign that raised approximately $500,000 worth in Bitcoins in August of 2014.
Photo Credit: Storj