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The storage sector is another area that cryptocurrency is starting to revolutionize with its decentralized cloud storage projects such as the two we are looking at today, Storj vs Filecoin. Two of the biggest in the space go head to head as we dive into what each of them does and how they differentiate.

Storj vs Filecoin

 

What is Storj?

Storj is a decentralized cloud storage solution that offers users a way to store files in a decentralized matter securely. Founded in 2017 by Storj Labs, Storj uses what they call “farmers” and “renters” to offer secure storage space, while farmers provide the storage space the renters, generally, the end user, can rent this storage space from them to store their files.

Storj aims to offer users a simple, secure, and affordable way for users to store data securely by simplifying the process and offering an end solution usable by the general public. Storj works by:

  1. Encrypting the users’ data with AES-256-GCM encryption
  2. The encrypted data is then split into multiple pieces that can no longer be connected
  3. Each piece of data is then split up between a number of nodes across the globe

Data stored with Storj is generally split into 80 different pieces however only 29 of these 80 pieces are required to reconstitute that data, making your data always available fast anywhere in the world.

Storj Pros

  • High level of encryption
  • Fast data retrieval
  • Affordable pricing
  • Easy-to-use UX

What is Filecoin?

Filecoin is a decentralized cloud storage platform that works with IPFS, a peer-to-peer distribution channel allowing secure and decentralized hosting for end users. Launched in 2020 but founded in 2017 by Protocol Labs, Filecoin works on the second layer of IPFS to offer users fast and secure data retrieval, this also enables IPFS users to reliably store data on Filecoin straight from the IPFS network.

Losing data can be a huge issue in both web2 and web3 storage solutions however Filecoin combats this issue by using cryptographic proofs which guarantee that your data remains available at all times. Filecoin operates as a peer-to-peer network that connects end users that want to store their data securely with storage providers all around the globe, similar to how Storj works. Filecoin works by:

  1. Understanding your needs such as how much data needs to be stored and for how long
  2. Assigns your data a unique ID
  3. Structures a deal between the user and the storage provider

Decentralized storage on Filecoin has shown to be over 95% cheaper than Web2 storage solutions. One of the large Web3 use cases for Filecoin is the storage of NFT data with over 90M NFTs stored on Filecoin, this is largely due to the interaction Filecoin has with IPFS which is often the go-to for NFT data storage.

Filecoin Pros

  • IPFS interoperability
  • High level of security
  • Highly scalable for large quantities of data

Filecoin Cons

  • Can be confusing
  • Dynamic Pricing

Being A Storage Provider/Node

If you are looking to be a storage provider or a node operator it is important to consider the hardware needed to run a node and also the payout for doing so. Storj offers a super simple setup with average payouts of $1.50/TB for disk space and $10-$10/TB for bandwidth. Filecoin on the other hand due to its dynamic pricing structure can be a bit trickier to calculate your potential earnings however I will link their calculator here.

Storj vs Filecoin: Which Is Better?

While both Storj and Filecoin are decentralized cloud storage solutions they are not identical, both with their own respective pros and cons. One of the main differences between the two is Filecoin’s use of IPFS, while Storj uses its own proprietary protocol to securely store data Filecoin has built on top of IPFS giving them the ability to harness the security and scalability IPFS has already developed.

This can be a pro and a con for both platforms, It could be said that Storj has a higher level of security using its own proprietary protocol offering a high level of encryption by default and splitting users’ files across many storage providers while IPFS does not do this by default.

Storj offers static pricing which makes it very easy to use and simple for non-crypto native users to understand while Filecoin uses dynamic payment depending on the storage amount of duration  needed by users, this makes it a bit more complicated for both the end user and developers.

From an investment point of view, Storj is a much lower market cap than Filecoin with a market cap of just $69 million compared to Filecoins market cap of $3 billion, in a sense, this tells us that Storj potentially has a lot more room to grow that its competitor Filecoin who already owns a large market share of the sector. On the flip side, you could also say that due to Filecoins larger market cap, it could be said that it is a safer investment as the price action may not experience as much volatility as a smaller market cap such as Storj.

FIL CoinGecko Info

 

STORJ CoinGecko Info

 

As always you should do your own research and potentially even sign up to both and have a play to help you determine which is the better decentralized storage platform to use and which is the better investment. Personally, I like Storj due to its static pricing and simple-to-use UX.

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