Siacoin is a cryptocurrency used to purchase cloud storage space through the Sia network. Users download Sia’s wallet app and can then buy storage space with Siacoins (SC), or offer their own unused hard drive space and receive SC as payment. According to its site, Sia aims “to liberate the unused bits of the world and construct the largest storage superserver on the planet”.
Coins are mined similarly to bitcoins using a fairly simple process. Unlike bitcoins, there is no limit to the amount of siacoins that can be mined. According to Sia’s Twitter, there will be about 60 billion siacoins in 2030. Coins can be traded for bitcoins or other currencies on currency exchange sites.
The idea behind Siacoin originated at MIT’s HackMIT hackathon in 2013. The platform was launched on June 7, 2015, and in August 2016, siacoins became available for trade on currency exchange site Poloniex. Sia is now owned by Nebulous Inc., a cloud storage startup in Boston run by David Vorick and Luke Champine, the creators of Sia.
How the Sia Platform is Built
Like fellow cryptocurrency blockchain network Ethereum, Sia uses smart contracts to enforce transactions and protect both sellers and buyers. Files hosted on the platform are encrypted to keep data secure and private. As part of the smart contract, hosts agree to store files for a certain amount of time, in the agreed-upon space; if they fail to meet the agreement or lose the files, the contract is not completed and the host does not receive payment. Sia also uses a scoring system to encourage hosts to maintain the availability of hosted files, and higher scores mean the host is more likely to receive new contracts.
The Sia wallet system assigns users “seeds”, automatically generated passphrases of 29 words, to protect their accounts. Advanced users may select their own password to increase security, but Sia recommends using the assigned seed as the password.
Siacoin Use Cases: Buying and Selling Storage
Siacoins have a much narrower range of applications than other cryptocurrencies, since they’re used specifically to purchase storage space through the Sia network. Users who are in need of space to store data, or those who have unused space available, make up Sia’s target market, along with Siacoin miners.
While Sia functions as a cloud storage platform like Google Drive or Dropbox, users may be drawn to it because it’s decentralized, like other blockchain-based technologies; there’s no third party involved, which keeps prices low and eliminates the risk of data center downtime. The absence of a third party also ensures that files are private and can’t be accessed by anyone besides the owner. The Sia FAQ addresses whether hosts can be held liable if a user stores illegal content, stating that hosts are considered safe according to the Digital Millennium Copyright Act and the Communication