Is Investing in Storage-Based Crypto Worth It?

Investing in Storage-Based Crypto?

Is Investing in Storage-Based Crypto Worth It: Storage-based cryptocurrencies are unique digital assets in that they are used for transactions in a relatively new kind of cloud storage system: decentralized, block chain-powered peer-to-peer networks that allow files to be uploaded and downloaded with a high degree of reliability, security, and accessibility.

Of all the decentralized cloud storage networks out there, arguably the most popular are the InterPlanetary File System (IPFS), Filecoin (which runs off of IPFS), Storj, and Sia. The forward-thinking pioneers who have put their resources together to create these projects strongly believe that they can compete with (or even help improve) the current tech giants that are dominating the cloud storage space today – Amazon, Microsoft, and Google. While they are relatively small for the time being, these networks have plenty of room for growth as the Internet’s data storage needs continue to increase and evolve. So, are storage-based cryptocurrencies worth it? This article aims to provide several considerations to be aware of so you can be informed and decide for yourself.

The Future of the Internet and Data Demand
We’re on the cusp of the next generation of the World Wide Web, which is being dubbed Web 3.0, or Web3. Other than being a fancy buzzword, what exactly is it? Web3 is a broad term for the vision of a new iteration of the Internet with an emphasis on decentralization that utilizes blockchain technology throughout its pages and services. Web3 aims to take power away from today’s tech giants and give it to the people, whether that’s through new decentralized social media networks or universal accounts we can use across the Internet. Its emergence has allowed for other new wave use cases often synonymous with Web3 that have made headlines in recent months including cryptocurrencies, metaverses, Play-to-Earn (P2E) games, NFTs, Decentralized Finance (DeFi), and Decentralized Autonomous Organizations (DAOs).
These new developments are quickly growing in quantity and scale along with humanity’s data generation reaching record highs. As more and more devices are connected to the Internet of Things (IoT) and technology continues to advance, the demand for data storage is looking to skyrocket over the next few years.

How Decentralized Cloud Storage Can Help
One solution to this growing demand for more data storage? Unused hard drive space belonging to both individuals and cloud server providers. Projects like Filecoin, Storj, and Sia are all working to provide decentralized peer-to-peer networks that are secure, affordable, and accessible without any one central entity in possession of users’ data. Each operate by means of a native blockchain and storage deals being made between clients looking to upload and download their files and storage providers who contribute their spare storage space to the network. As mentioned above, these storage deals are facilitated using each network’s native utility cryptocurrency token. Concurrently, storage providers are rewarded in these tokens as an incentive for being a part of the network.

Can Mass Adoption Happen?
This may sound all good and well, but when it comes down to it, mass adoption is what will truly decide if these projects can succeed. Each of these networks are comprised of passionate yet minuscule userbases when compared to the providers we rely on today. Thus, the question becomes whether or not these young, promising projects can complement, or even overtake today’s established large-scale cloud data storage providers in time.

Is it even possible? Sure. As we’ve seen in the last couple years, social discourse is changing. Large tech companies such as Meta (formerly Facebook) and Amazon are facing more scrutiny than ever before for their practices, both by the general public and legislators. It’s clear society is more aware of (and displeased with) our personal data being collected and harnessed by such companies, and decentralized alternatives are a path forward towards returning that lost privacy. However, the extent of this sentiment and if it’s enough for our world to gradually distance ourselves from the permanence these entities have in our lives and begin to explore other options remains to be seen.
In the end, whether or not storage-based cryptocurrencies are worth investing in is up to you. If you truly believe decentralized cloud storage can succeed and don’t mind holding onto your tokens for some time, by all means, go for it! If not, that’s fine too. There are plenty of cryptocurrencies out there with different utilities just waiting to be found.

As with any investment, always do your own research and use your best judgement before jumping in.
Good luck!

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