Bitcoin and its underlying technology, the Blockchain, has undoubtedly shaken up the world of finance forever. The creation of a universal, immutable, and decentralized ledger for value transactions has been a completely pivotal innovation for the world financial industry. The same can be said for Ethereum, smart contracts, and how they are shaping what is becoming the new version of the internet, the Web 3.0.
Ethereum and the advent of smart contract technology have opened up unimaginable possibilities in countless fields, where decentralization can improve transparency, fairness, and accessibility for all parties involved. This is something that can be observed in the growth of the Decentralized Finance (DeFi) and Non-Fungible Token (NFT) industries.
However, there are trade-offs when it comes to decentralization and the path towards it will be a hard and strenuous one. A factor that can be observed is the scalability issues currently at play in the Ethereum ecosystem, where simple transactions may cost upwards of 10 dollars when the network suffers from congestion. Not to mention more complex smart contracts that may cost upwards of $100 to execute!
As most of us know by now, however, a lot is being done to make sure this issue is solved. From new blockchain ecosystems (like Avalanche or Solana), there are also second layer 2 solutions being developed for Ethereum itself. Moreover, the progress towards the launch of ETH 2.0, while slow at some times, may help the network regain its status as the “king of DeFi”.
What about data?While the blockchain has proven to be a great way to maintain a decentralized ledger of balances and transactions, it has many limitations, especially when it comes to metadata storage and distribution. In the meantime, blockchain is perfect for keeping track of transactions, balances, and permissions, there is something amiss in our journey towards full decentralization.
Decentralized content storage and delivery protocols may be the key to democratize the world of financial investment and literacy.
In the early days of the Internet, known as the web1, building the interconnectedness of networks was at the core. Today, in what is known as the web2, web applications must grow and are at the mercy of scalable infrastructure cloud providers, like AWS and Azure, who are often constrained by the fact that these providers own their content.
While not new, decentralized storage is still an instrumental step when it comes to ushering the “new” era of the Internet. We’ve seen this with P2P networks like BitTorrent. The world’s hunger for decentralized, private and fair models of data sharing (financial and of all sorts) is undeniable and despite the challenges currently being tackled by the most popular ecosystems: including, lack of ease of use and high gas fees, it seems clear that blockchain networks like Ethereum and others are here to stay.
So, what’s next?As we enter the Web 3.0 era, several unique storage solutions have begun to compete with centralized hosts for market dominance across a variety of application scenarios since the emergence of blockchain as an incentive layer for decentralized storage markets, with several notable storage solutions beginning to fight for market dominance across a variety of application scenarios since the emergence of blockchain.
Though centralization has its benefits--higher speeds, higher availability, quick throughput--all of them come at the cost of severe disadvantages like censorship, lack of data privacy, ownership and control, and security breaches.
China, for example, has limited the use of social media. Access to Twitter (NYSE:TWTR), YouTube, Facebook (NASDAQ:FB) is limited. Domestic social media sites such as WeChat, Weibo (NASDAQ:WB), Renren, and YouKu serve as news sites and instant messaging applications. The country has also banned access to Google (NASDAQ:GOOGL), using state-controlled Baido as its main search engine.
The problems these presents are obvious. The EU's lead privacy regulator noted that there was a 71% increase in data breaches between 2018 and 2019. And that is just one of them. Centralized storage poses increases the opportunity for data breaches and theft. In 2019, nearly 7.5 million Adobe (NASDAQ:ADBE) Creative User records were left exposed to anyone who could access a web browser. These included web addresses, account information, and the Adobe products they used.
The solution? Decentralized storage network.
Decentralized storage system? What is that?Decentralization means that the system is not reliant on a central authority. In technical terms, decentralization is a subset of distributed architecture in which all participating nodes make decisions independently rather than relying on a single node. Decentralization has been around for a long time and relates to governance, decision-making, and control.
A decentralized storage system works based on open participation and free-market principles. This means that anyone can join the network, and data is duplicated across several nodes across the dispersed network to avoid a single point of failure.
The logical inclusion of public-key cryptography is also made possible by blockchain integration. Data is usually encrypted before being stored with a host, making it decipherable only by the rightful owner and any parties the owner has chosen to share it with. This method can make these systems more resistant to censorship and manipulation and make any data compromised in a breach useless to an attacker.
When we talk about cloud storage, we mean that you can store your data on many different nodes scattered over several places rather than on a single server or location. In terms of broad decision-making authority, these nodes are entirely independent of one another.
Swarm is one such decentralized cloud storage system, a distributed storage platform, and content distribution service that leverages Ethereum Web3.
Swarm: The Bees are nodesSwarm is a decentralized storage and communication infrastructure that is censorship and DDOS resistant, and it serves as the foundation for Ethereum's Web3 stack. Swarm was the brainchild of Gavin Wood. Ethereum Foundation was funding the project and the research needed until 2020. After that Swarm graduated from Ethereum Foundation and ensured its own fundingIt is a project that allows the mining pool's storage, bandwidth, and processing capabilities to support the Ethereum project network's application.
The network takes the form of a distributed, content-addressed chunk store, with peer discovery and communication handled by Ethereum's libp2p network layer where each node is like a bee among other worker bees.
It’s a platform that enables members of self-governing societies by increasing their productivity, providing an environment for their digital applications, and offering them access to a global platform. It’s an inclusive, permissionless, and censorship-resistant cloud storage platform that can be likened to being the hard drive of the Ethereum blockchain.
Like the open-source movement, Swarm shifts costs from developers to consumers because resources are paid in Swarm and realized on demand, as and when it occurs. It can save innovative firms time and money by allowing them to scale quickly without setting up funding for deployment needs.
The Swarm Accounting Protocol, or SWAP for short, charges nodes for demanding resources and rewards them for serving resources. Ethereum is utilized for smart contracts to build up its incentive framework. Swarm proposes to create an environment where nodes aiming to maximize their profitability will naturally cache and store content that they can deliver often using SWAP and its address-key-based retrieval protocol.
It’s worth noting that Swarm does not aim to be a competitor to Ethereum in any way, but rather an extension of it. During the projects’ annual event, the “Swarm Summer School ‘21” Viktor Trón, team lead of Swarm stated:
“In general, the overarching line of the talk will be to walk you through this misconception that Swarm is not only a project that uses Ethereum but in fact, Swarm should be considered to extend the ethereum blockchain into a fully-fledged computational environment, which is realizing the much commented concept of the word computer and serves as the operating system of the decentralized internet, and therefore it's a genuine next step in the evolution of decentralized projects.”
The platform's native token, BZZ, will be a utility coin targeted at incentivizing decentralized storage and transactions. The team has also created a book on the subject titled the "Book of Swarm,” which has a wealth of information on Swarm and BZZ. There is also the Swarm Whitepaper which, while technical, it’s easier to “digest”.
Swarm raised $6 million in a private token sale in February, and a public BZZ token sale took place on June 14 on the well-known Coin List which counted with over 20,000 crowdfunding participants, following the mainnet soft launch.
About SwarmSwarm is a distributed storage platform and content distribution service, a native base layer service of the Ethereum web3 stack that aims to provide a decentralized and redundant store for dApp code, user data, blockchain, and state data. Swarm provides various base layer services for web3, including node-to-node messaging, media streaming, decentralized database services, and scalable state-channel infrastructure for decentralized service economies.
Swarm is a distributed storage platform and content distribution service. It is a local basic layer service of the Ethereum web3.0 stack. The project is led and developed by the Ethereum Foundation.
Visit Swarm’s website and follow them on Twitter, Discord, YouTube, Github, and Reddit to learn more about the project.