Siacoin: The Airbnb of Hard Drives – A Detailed Explanation
- Siacoin allows users to rent free space on their hard drive in return for some rent.
- All the transactions on this platform take place in its native cryptocurrency- Siacoin.
Siacoin is a very unique cryptocurrency, often called the AirBNB for hard drives. This decentralised network allows users to store their data in cloud hard drives and the interesting part is that these cloud hard drives are not stored at a big server centre of the company. Instead, this project utilises the empty space in user’s computer to store data. This means you can also rent out some space for your hard drive that you do not use often. In return, you will receive rent for it.
This might look like a normal project, but what makes it related to cryptocurrency is the mode of payment it uses for transactions, such as the rent you receive for renting out your hard drive. . This platform has its native cryptocurrency called Siacoin and it pays the rent in this cryptocurrency.
By using its native cryptocurrency for payments, it not only facilitates the rental process but also promotes the adoption and usage of Siacoin. Another reason it is related to Web 3 is that it operates in a decentralised manner. Although the founding team makes decisions regarding the company’s policies, since it functionson a peer-to-peer basis, it can be considered a decentralised cryptocurrency.
That covers the basics of Siacoin. Now, let’s understand how it works.
Founders of SiaCoin
This cryptocurrency, Siacoin, was founded in 2013 by two developers, David Vorick and Luke Champine, who were computer science students at the Rensselaer Polytechnic Institute in New York.
In 2013, they participated in a Hackathon held at MIT University, and the very next year, they released their own project called Nebulous Inc. This project received funding from well knownVenture Capital providers like Xialoi Li and Procyon Ventures, raising a sum of $750,000 in funding.
To date, Nebulous has raised approximately $6.4 Million in funding from firms like Raptor Group and Fenbushi Capital. They have also developed a team that maintains this network.
Working with Siacoin
Siacoin operates on a peer-to-peer system, with participants in the network acting as hosts and renters. This decentralised system ensures that no central authority manages the stored data, giving users complete control over their data.
The network of Siacoin is supported by nodes, but the design ensures that a random node cannot access the complete information of the data. Instead, all the stored data is divided into small encrypted parts, preventing unauthorised access and ensuring the data’s security.
From Where Does the Value of the Siacoin is Derived
This currency derives its value from the technical capabilities and utilities it provides. Siacoin is the only cryptocurrency used throughout the entire network for both hosts and renters. All transactions are using this cryptocurrency only, which is how Siacoin acquires value through its utility and widespread adoption.