What is cryptocurrency Siacoin (SC) and how does it work?

What Is Siacoin?

Siacoin is a peer-to-peer decentralized blockchain-based cloud storage platform where network participants rent and use storage space and excess bandwidth from other users. Sia network doesn’t have a central authority, which means that the entire system is democratized through the use of the P2P system and decentralization.

Due to the existing model of operations, Siacoin cloud storage is more secure than traditional cloud storage services and is likewise cost-effective, with significantly lower prices for renting storage when compared with centralized cloud storage providers. Anyone who has extra storage space can rent it out on the Siacoin marketplace and get rewarded in the form of Siacoin tokens, which are paid by the consumers who use the rented bandwidth and storage space.

Traditional cloud service providers such as Apple and Google are still very popular, despite the obvious shortcomings when it comes to the cost of renting storage space. However, the Siacoin network aims to attract more users that would appreciate the secure environment with low-cost storage that Sia represents. Furthermore, Siacoin aims to help users take back control over their data. The Siacoin network data users are data owners since no third parties or central authorities control the system. The Siacoin system resolves some of the most common problems in the sector of cloud storage, including high costs for renting storage, hacking risks, data control, and data mismanagement.

How Does Siacoin Work?

Siacoin network is based on a peer-to-peer system that allows network participants to act as hosts and renters within a decentralized ecosystem – with no central authority to control the data or manage the ownership of stored information. Sia network users are completely in charge of their data and storage space, while renters pay hosts in Siacoin (SC) in exchange for their services. The network is supported by nodes, while the Siacoin system breaks the users’ data into smaller fragments and distributes it across the nodes. A random node can’t access the users’ information since it is private and can be accessed only with private keys that prove ownership over the data. Even if a node could access the data, it would access only a part of it, making the information useless.

Thanks to the distribution across nodes, the level of vulnerability is decreased and the level of security increased as a result. Each piece of information is fragmented and split into 30 parts. Thanks to the decentralized nature of the network, Siacoin is able to provide a real-time immediate response so users don’t have to wait for a central server to respond to a query. The two main components of the Siacoin network are hosts and renters. Hosts are paid by renters for providing cloud storage services. The hosts can promote their storage capacities and services, and can even refuse to rent storage to certain consumers. The core of Siacoin functionality is the concept of File Contracts, which are a version of smart contracts. File Contracts have predetermined rules and are based on automation to allow communication between hosts and renters.

Siacoin is based on the Proof-of-Work (PoW) protocol, which means that SC coins can be mined, while there are no limitations on the maximum supply of Siacoin (SC).

Who Are the Founders of Siacoin? History of Siacoin

The idea of Siacoin cloud storage was presented at a hackathon at MIT by David Vorick and Luke Champine. Vorick and Champine founded Nebulous Inc. – the parent company of Siacoin – in 2014, launching the beta network for Siacoin in 2015. The team received $750,000 in funding from several sources for the Nebulous Inc. and Siacoin project. By the end of 2015, Vorick and Champine had launched the final version of the Siacoin storage network. Since launching the final blockchain, Vorick and Champine have raised over $6.4 million for the company, from investors such as Fenbushi Capital, Raptor Group, INBlockchain, and First Star Ventures.

Since starting out as a dynamic duo, Vorick and Champine have added a great number of developers to their team as the Siacoin network continues to develop and evolve.

What Makes Siacoin Unique?

Siacoin is unique thanks to its original utility and efficient functions. Siacoin aims to decentralize the sector of cloud storage, given that traditional cloud service providers charge higher fees for rental, and may have issues with mismanagement of data, lack of security, server responsiveness, and data ownership.

Siacoin resolves these issues through the use of a decentralized environment and peer-to-peer system where users can communicate through File Contracts and define the prices of contracts and rental agreements. Siacoin aims to become one of the biggest decentralized cloud storage networks where users’ data is secured and protected, and the ownership of data is proven through the ownership of private keys.

What Gives Siacoin Value?

Siacoin derives value from its technical capacity and utility. SC coins are the native currency of the system and the only currency that can be spent within the network when creating a contract between a host and a renter. That is how Siacoin acquires value from its utility, adoption, and technical capacity.

In order for the system to work in a peer-to-peer fashion, renters need to pay hosts for their services in the Siacoin currency, which means they need to buy SC. Hosts need to sell their SC coins in order to make a profit and monetize their services, but they can also keep and hold SC. The very P2P system that Siacoin uses is what gives it value, combined with attractive services and technology.

Siacoin SC

Buy

Bitcoin BTC

Buy

Ethereum ETH

Buy

XRP XRP

Buy

How Many Siacoin (SC) Coins Are in Circulation?

As of May 2021, there are around 47.8 billion SC in circulation out of an unlimited maximum supply. Siacoin doesn’t have a finite supply, which means that new SC can be mined infinitely. Miners create new blocks, validate transactions through Proof-of-Work, and are rewarded with SC for each new block.

Siacoin is made to satisfy an infinite demand for P2P cloud storage services, which is why there is no limit on its supply.

Other Technical Data

As of May 2021, the Sia platform has been downloaded 1.2 million times. The network includes 554 storage providers with a total storage capacity of 3.3PB (petabytes), of which 754TB is currently in use. The cost of Sia’s storage is an average of 90% lower than incumbent cloud storage providers.

How Is the Siacoin Network Secured?

Siacoin is secured through fragmentation of the uploaded data and through the use of the PoW consensus mechanism. Transactions are permanently written in blocks that are generated with the support of miners. Those miners are rewarded for protecting the network and for creating new blocks and verifying transactions on the ledger.

Data uploaded onto rented storage is protected through fragmentation. The data is split into fragments and distributed across nodes that run the network. So even if one of the nodes is compromised, only a fragment of information is revealed, making it unuseful to malicious participants. The only way to unlock that data is through proving ownership of it, which can only be done with the matching private keys. That is how users’ data is secured through decentralization and fragmentation.

How To Use Siacoin

Siacoin is the native currency of the Sia storage network and the only currency of value that can be used to pay for storage services on the blockchain. Siacoin is inclusively used in the peer-to-peer system, while it also acts as a mining reward. Aside from being a reward and a native cryptocurrency, Siacoin can be traded on the market for a profit based on the difference between the buying and selling price.

To pay for the storage services on the Siacoin blockchain, renters need to buy SC that is then used to make a File Contract, similar to a smart contract, that defines the price and other specifics regarding the storage rental. Hosts are paid in SC and can make a profit on selling SC when the market price is right for them.

How To Choose a Siacoin Wallet?

Siacoin is the native currency of the Siacoin blockchain and it uses dedicated wallets for safely storing SC coins. One of the most commonly used mobile wallets is Sia Android Wallet, while Sia-UI is the official desktop wallet and the only wallet that is recommended by the team behind SC. You can also store your SC coins in any wallet where they are supported and the type you choose will likely depend on how much you have and what you intend to do with it.

Hardware wallets (aka cold wallets) like Ledger or Trezor offer the most secure option with offline storage and backup. However, they tend to be more expensive and difficult to understand so are probably more suitable for those with experience and large amounts of SC to store.

A simpler, and usually free option, is software wallets. These can be downloaded to your smartphone or computer and may be custodial or non-custodial. With custodial wallets, the private keys are managed and backed up on your behalf by the service provider. Non-custodial wallets make use of secure elements on your device to store the private keys. Software wallets are more convenient for making transactions but less secure than their hardware counterparts, meaning they’re better suited to inexperienced users with smaller amounts of SC.

Finally, there are online wallets or exchanges, known as hot wallets, which can be accessed with a web browser. These are less secure than the alternatives and require users to place their trust in a platform to manage their Siacoin. These are best for those who are holding small amounts of SC or are making frequent trades. Just make sure to pick a service with strong security measures and a good reputation.

Kriptomat offers a secure storage solution, allowing you to both store and trade your SC without hassle. Storing your Siacoin with Kriptomat provides you with enterprise-grade security and user-friendly functionality.

Buying and selling SC, or exchanging it for any other cryptocurrency, is done in mere moments when you choose our secure platform as your storage solution.

Siacoin Mining

Siacoin is a mineable coin, which means that miners are an integral part of the system. The supply is infinite to respond to endless demand and enable the smooth functioning of the P2P storage system. Unlike Proof-of-Stake blockchains that depend on a number of users staking crypto, Siacoin runs on the Proof-of-Work protocol that depends on miners. Miners are rewarded with SC coins in return for their participation in block generation and verification of transactions.

Conclusion

Siacoin is one of the biggest peer-to-peer cloud storage platforms with a marketplace of cloud services. Although Siacoin has a fair number of competitor blockchains with more or less similar functions, Siacoin is still among the most popular service networks of its kind. It provides cost-effective storage space for rental and a secure and decentralized environment for its P2P marketplace. As long as the system functions and the marketplace is live, the value of SC has the potential to grow with the expansion of the blockchain.

Siacoin FAQ

Is Data on the Sia Network Secure?

Data hosts are financially incentivized to provide enterprise-level service. What’s more, files are divided into 30 segments before being uploaded and then spread all over the world on the Sia network. This means there is no single point of failure so the data is kept secure.

How To Buy Siacoin?

If you’ve ever wondered how to buy Siacoin, you will be happy to learn that buying Siacoin is rather simple. The first thing you need to do is find a crypto exchange that supports Siacoin (SC), like Kriptomat, and create a free account. Once you create an account, you will be able to place a buy order and purchase Siacoin at the price you consider convenient.

How To Sell Siacoin?

Selling Siacoin SC is as easy as buying it at Kriptomat. Place a sell order to sell SC at the price that can bring you a profit. You can make positive returns on the difference between the buy and sell price.

Siacoin Price

Siacoin price is in constant flux as it changes with the changing market trends and can be influenced by numerous specific factors that can affect its market price. These include project news and developments, market sentiment, the flow of cryptocurrency on exchanges, and the economy in general. Additionally, the amount of adoption of the Siacoin network will also likely impact SC price as it dictates how many people require Siacoin to pay for storage.

The current Siacoin (SC) price is EUR.

The 24-hour trading volume of SC is EUR. SC is currently ranked of all cryptocurrencies by total market cap, with a market cap of EUR. It has a circulating supply of SC.

Register now to begin your journey into the world of Siacoin and cryptocurrencies with Kriptomat!

If you’re experiencing any issues or have any questions at all, please don’t hesitate to reach our Customer Support Team. We’re always here to help!