WWCode Talks Tech #21: Insight Into Decentralized Storage
The so-called intelligent machines operate based on information fed to them. Data is the new oil. Companies developing these machines need data. The more, the merrier. The data trade has become a trillion-dollar affair, which is done by putting our privacy at stake.
To tackle this, we needed a more democratic solution for data storage. That is where decentralized storage comes into play. To understand what decentralized storage is, we first need to understand what centralized storage is. A centralized storage system stores all the data on a single server. All the actions we do on the web, and all the personal information we provide to our website, are stored on a central server.
Decentralization comes into play and splits the user files into different encrypted fragments and allocates them to different network nodes. That is how a distributed, secure ledger of files is created. And it is on the blockchain. That makes our data secure. Not even a single node would be able to decrypt the data stored there because that is in the form of a hash, and it is encrypted using cryptography and algorithms such as SHA-256.
Why do we need decentralized storage? We already have central servers, but why do we need them? When decentralized storage comes into play, security is enhanced. No one can hack the decentralized storage. In centralized storage, all our data is stored at a single point on a single server, so the problem with one server could lead to a data breach of all users. In decentralized storage, this is not the case.
All data is divided into several fragments and stored on different nodes, and each of these nodes cannot decrypt the data because, again, it's hash, so the security is enhanced a lot. It's an open-source service. Anyone can utilize and use it. It's an inexpensive solution. The central storage database is an expensive affair, and time and money is needed to set up those servers, but decentralized storage is a computer network. They reward the users who provide storage in their system. It's very fast compared to the centralized server. Within seconds, you get the IPFS or the hash of the file you have stored. Also, if you become one of the nodes in that decentralized, secure network, you get the opportunity to earn money.
How does it work? Let us suppose you have a file that you have uploaded on a decentralized server. The file gets split into several parts, and then these parts are encrypted using cryptography or some kind of algorithm, and these encrypted files are stored on different nodes. This all together forms decentralized storage.
No single computer has access to all the files. It's all fragmented, encrypted, and cannot be decrypted by any node. The cryptography algorithm is tried and tested, and a Merkle hash tree is used to do the same. Storage system economy.
It's a famous saying that data is the new oil, and the numbers say it all. As the number of web users increases, so does the need to store their data. By 2025, over a hundred gigabytes of data will be stored in the cloud. Cloud data centers will process 94% of all workloads in 2021. In 2020, the total worth of the market was $371.4 billion. It's projected that the market will increase to $832.1 billion by 2025, with an overwhelming 94.44 percent of data being stored on Google Drive, which is decentralized cloud storage.
We can see that the economy is growing at a tremendous pace, but users are also becoming conscious of their data privacy. They don't want the websites to store cookies and their data and sell it to a third party to make money. They need the right to privacy.
What's the basic difference between centralized storage versus decentralized storage? Centralized storage uses a centralized single server. All the data is stored at a single point, which could lead to the breach of all the files stored on that server. On the other hand, decentralized storage works on a peer-to-peer network. It's a distributed network of computers that stores the files or the fragments of files available.
In centralized storage, you lack ownership of your data. if you have stored your information on a centralized server, whosoever owns that server owns your data. In decentralized storage, only you are the owner of your data. It is stored on different nodes, but no one can decrypt it except you. You are the sole owner of your data, and the ownership is preserved, which is a fundamental right of any web user.
Centralized storage has a very high cost. We have seen Google’s server storage. Those are large rooms with large computation power and servers being set up. On the other hand, decentralized storage is low-cost because different computer networks are connected, and we don't need to set up those large server rooms.
Centralized storage is relatively slower. Decentralization processes things faster. The fragmentation of all the files and encryption and decryption happens faster than the time taken by the file to be stored on a central server.
A central server is vulnerable to security threats because it is stored at a single point. A single point is responsible for all security vulnerabilities which we have. On the other hand, decentralized storage has greater security and privacy.
A breach is next to impossible because to hack those, the hacker needs to hack more than 51% of the nodes out there. Hacking more than 51% of the networks or computers in a decentralized network is next to impossible—the security and privacy levels increase.
With centralized storage, there are higher chances of losing your file. If any mishap happens with the server room or server or any technical glitch, all files are lost, and recovery is next to impossible. On the other hand, in decentralized storage, as the files are stored in segments, there's only minimal file loss. There are far fewer chances of losing a file.
So now, moving on to ‘what is Web 3.0?’ Web 3.0 is the third iteration of the worldwide web. Everything we discussed is based on the web, the data we are collecting. Web 3.0 has blockchain as its underlying technology. A blockchain is a secure distributed ledger, similar to the ledger or the network of computer nodes, which we discussed for a decentralized storage network. Blockchain is a network of nodes and is secure and distributed. Web 3.0 propagates decentralization. That means no central authority should have the right to operate. Users are the owner of their actions, and privacy is preserved at all costs.
In Web 3.0, The user can read, write, and execute transactions on the web. There's no third party behind the scene operating it on their behalf. It advocates privacy protection, data standby redundancy, and value-oriented data by providing network nodes and content uploaders with incentives.
Integrating decentralized storage with blockchain provides strong scalability, high security, high efficiency, automatic fault tolerance, high reliability, and low cost. All these perks benefit Web3 because decentralized storage has been incorporated into it. That’s the relevance of having decentralized storage. Security increases many folds. Fault tolerance increases manyfold. The cost is reduced significantly, and the reliability is very high. The ownership of data and the privacy of a user's data is preserved at all cost. The information is stored on the cloud, but it's decentralized, again divided into fragments and encrypted.
IPFS or Pinata files are used to mint an NFT, a non-fungible token. We upload the metadata or the basic information about that NFT onto an IPFS. From IPFS, we get a unique hash. Suppose I upload an image twice. I will get the same hash because it's being encrypted so that a file is converted into a hash, which is the unique identifier of an NFT, making it a non-fungible or unique token. Decentralized storage forms the basis of non-fungible tokens by providing a unique identity to every file being uploaded.