Storage Token— What Are Decentralized Storage Cryptocurrencies And Will They Play A Role In The Future Of Blockchain?

Moonrock Capital
6 min readJul 19, 2022

Decentralized Storage

Before we talk about storage tokens, it’s important to understand its origins: Decentralized storage platforms.

We all have pictures, videos, songs or other files that need to be stored somewhere digitally. While most of us only use our devices for storage, sometimes that’s not enough. This is where blockchain-based cloud storage can provide individuals with additional storage space.
Cloud storage is easier to restore after a loss, and if you have internet access, you can download your data wherever you are. However, centralized storage platforms like Microsoft OneDrive and IBM Cloud Storage are vulnerable to data theft or loss due to vulnerabilities known as single points of failure.

Decentralized storage platforms can overcome this obstacle by breaking user data into smaller pieces and distributing them among nodes (or devices) in a decentralized network. Data is also automatically encrypted when uploaded to the web. Encryption will not harm or compromise your data, but will keep it super secure and inaccessible to malicious parties. It also means that the device that stores your data cannot decrypt it, as each device only holds a small portion of the data, and encryption makes it unreadable.
Since a single entity or server can store all the information in a centralized network, the chances of the network being completely shut down or hacked are much higher. Additionally, centralized platforms used to illegally sell private user data have been exposed in the past.

In short, centralized storage platforms cannot provide the same level of security and transparency as decentralized storage platforms. This makes it easier to access your data without your consent, and the cloud provider may also have ulterior motives.

Storage Token

Businesses and individuals store large amounts of data with centralized entities frequently. Large corporations, such as Amazon, One Drive, and DropBox offer data storage services as an alternative to data storage on local hardware or servers. Despite their usefulness, these services have several disadvantages.

Data stored on a centralized database presents a single point of failure. If one entity were to come under a cyber-attack or experience downtime due to technical reasons, it could affect thousands, if not millions of users. In turn, many people may not have access to their data or services when needed. Moreover, giant cloud storage companies often use or sell data without the knowledge of the owner. When users give their data to centralized data storage services, they usually give up their rights and permissions regarding how companies can use said data.

Because blockchain technology can ease the issues around centralized data storage providers, decentralized file storage solutions are becoming more accessible. Decentralized storage platforms increase transparency, eliminate the threat of data theft, and offer users a secure way to store their data. Furthermore, some decentralized storage networks provide users the opportunity to earn a passive income with crypto. Decentralized data storage platforms are secured with native storage tokens and storage coins.

Decentralized storage solutions exist without centralized storage hosts. Rather than a single entity controlling and monitoring siloed information, decentralized storage platforms distribute data across multiple hosts in different locations. Furthermore, servers operate using a network of independent nodes. By utilizing spare storage space on computers, these nodes can generate passive income.

The immutable ledger of data transactions is maintained by many decentralized data storage platforms using blockchains. Blockchains are used both publicly and privately in these applications. Blockchains are used to establish decentralized data storage networks where participants earn native storage coins or storage tokens. Some decentralized storage tokens and coins act like bonds, meaning they can be staked or locked up as collateral to secure a network. As a result, malicious node operators can lose their stakes. As a result, nodes are more likely to behave honestly.

Due to the fact that decentralized cloud storage is spread across large networks, altering or censoring data is more complex than when it is stored in a single centralized server. In addition, blockchain-based decentralized storage networks use private key encryption to ensure data security.

Additionally, immutable decentralized storage solutions reduce costs, increase download speeds, and eliminate bottlenecks. A file that is divided into several pieces and distributed among several nodes cannot be read by a single node without permission. Resultantly, decentralized storage solutions provide higher levels of security and privacy than centralized solutions.

Additionally, users of decentralized storage platforms pay for transactions using decentralized storage coins and tokens. Moreover, these decentralized storage tokens and storage coins serve as rewards for node operators for providing data storage services.

Best Storage Token In The Game


Powered by the native Filecoin token (FIL), Filecoin is an open-source, decentralized file storage protocol that operates on Ethereum. Following a successful initial coin offering (ICO) in 2017, Filecoin welcomes support from ConSensys and Protocol Labs to facilitate interoperability across the Filecoin network. Filecoin provides users with another option to centralized data storage providers. Plus, Filecoin offers its users a way to earn a passive income with their space computer storage.


Sia is another big player in the decentralized storage game and was one of the first ever to be developed. This platform offers decentralized cloud storage to users by dividing their data into smaller pieces that are then spread across nodes within the network.

As said by Sia’s own developers, the network offers “underutilized hard drive capacity” to users, which is kept secure with blockchain technology. In addition, data transactions are protected with smart contracts, which allows for a more affordable cloud storage option. Sia users keep their private keys, meaning their stored data cannot be accessed or altered by others.


Storj is one of the world’s most popular decentralized cloud storage platforms, with tens of thousands of users. Founded in 2014 and launched in 2018, this network allows you to store your data in a private, encrypted format (specifically using AES-256-GCM symmetric encryption). Like Filecoin and Sia, Storj splits your data into smaller pieces, increasing its durability and security. Storj splits each file into exactly eighty pieces each time, and each piece is sent to a separate node. You can rent storage space from other users within the Storj network, though this comes at a fee.

Like the other two storage platforms here, Storj has its own digital currency by the same name. Storj pays its users using their native currency to rent out their storage space. When one does this, they become an SNO (or Storage Node Operator). Many choose to make money using Storj instead of renting out cloud storage space for their data.

Passive Income And Summary

There are 295 billion gigabytes of data storage globally. So much of this is untapped potential for sharing, renting, and hosting data through a decentralized storage network. Projects such as the ones mentioned in this article and others such as Ocean Protocol and Internet Computer Protocol (ICP) work together to create a decentralized internet.

With increased security, transparency, and user control, decentralized storage platforms could truly prove to be the next industry giant when it comes to cloud storage. Along with their native tokens and coins, these platforms contribute healthily to the crypto market, giving people the ability to store their data safely and make some passive income by renting out unused storage. Time will tell whether or not we all end up using such platforms in the near future.



Moonrock Capital

Moonrock Capital is a Blockchain Advisory and Investment Firm, incubating and accelerating early stage startups since 2019.