STORJ

Most recent update: [June 26, 2023]

What is Storj? 

Storj is one of the top crypto-powered storage platforms that allows any computer running its software to rent unused hard drive space to users seeking to store files. STORJ is an Ethereum token deployed to power decentralized storage for various developers known as Storj Decentralized Cloud Storage (DCS). It uses a decentralized network of nodes to host user data, the platform secures the hosted data using advanced encryption.  

In the DCS, all the files are distributed into smaller fragments over the global network that includes smaller network branches. Also when a user requests a file, all the tiny pieces are gathered from multiple networks and then securely made available for the user.  

Additionally, the STORJ token is used as an exchange of value. Although the company does not have its own data centers, it facilitates individuals and organizations by sharing available or even excess storage space. The participants in the network are nodes and gain STORJ tokens as a reward. 

How Does Storj Work? 

Storj works uniquely to ensure that the user data is safe and easily accessible. The software automatically encrypts every file before it gets uploaded to the cloud. After the encryption, the file is split into pieces and distributed throughout the network of independent hosts. The protocol uses the Proof-of-Work (PoW) consensus for node operators to validate the files.  

Moreover, three main components power the Storj network. These are: 

• Storage Nodes: This permits users to rent out excess space on their hard drives and reliably store and return data for a specific fee. 
• Uplinks: Uplinks run on the client’s machine and upload files to the network. It also coordinates with peers to store and retrieve data.  
• Satellites: The satellites are mostly responsible for storing metadata, keeping storage nodes honest, and distributing payments. It also manages the traffic between the storage nodes and uplinks. Every user will have an account on a satellite.  

History and Founding Team  

Storj was first introduced to the world as a concept in December 2014. It was aimed to be a decentralized peer-to-peer encrypted cloud storage platform. Storj was thus one of the oldest blockchain projects, initially conceived as an encoded crypto storage platform, an updated white paper was published with the full network model two years later. It became a decentralized network that connects users who require cloud storage space with those who have hard drive space to sell.  

The first white paper that detailed the concept was launched by Software developer Shawn Wilkinson and co-founder Quinn. Further, the company Storj Labs was formed in May 2015. The updated current version of the platform was then launched in 2019.  

Shawn saw the power of blockchain technology and how it can be leveraged to create a decentralized storage network. At the same time, Quinn was an ardent blockchain enthusiast with an excellent background in business development. Today, Wilkinson is the chief strategy officer (CSO), Quinn is the chief revenue officer, and Ben Golub serves as the CEO of Storj Labs.  

What Makes STORJ Unique 

Compared to any other decentralized cloud storage network, Storj is unique in several ways. Unlike traditional cloud storage solutions that store data in huge data centers, Storj runs on a network of thousands of independent computers. Moreover, default encryption is standard on every file, since everything is encrypted before being uploaded, users’ data stays with them and others they share it with. Moreover, the efficiency of the network is that the host pays less for the storage of their data than any other traditional cloud storage service.  

By launching the Storj DCS, the crypto is making headlines in the decentralized internet space. DCS allows developers to leverage unmatching privacy and security benefits of storage. Moreover, with this novel multi-talent gateway changing storage to Storj is extremely simple.  

Storj also offers high-end security. The user interface offers a fast and easy way to access and retrieve objects, making the technology highly resistant to node failures. Additionally, the network employs a Proof-of-Work consensus protocol and is also connected with a few tools like file connectors and dashboards, making users’ experience even smoother.  

Yet another interesting feature of Storj is that users can access their files seamlessly whenever they want, the platform will automatically download pieces of the required file from the servers closest to their location. Storj can quickly reach the pieces spread across 10,000 servers and around 84 countries, speeding up downloads. This high-speed access is extremely significant for file sharing, especially for users who need to share large files with a globally-distributed team.  

How Is STORJ Secured? 

One of the unique features of Storj is its unparalleled security features. Storj DCS is the world’s first open-source, decentralized cloud storage layer that is private by design and secured by default. It enables developers to build the best data protection and privacy into their applications. Since the system is peer-to-peer encrypted, each file is encrypted before dispersing to the network of independent hosts. Each node receives a random fragment of a whole file with decryption keys split between each node and the host, this makes it highly secure and almost impossible to hack.  

This unique mechanism ensures that the user data is highly protected against any hacks and other malicious attacks. It also removes the risk of storing data in a few isolated data storage units, which could be subjected to a planned, coordinated attack, leading to a mass loss of user data. The node operators will be rewarded for hosting data as well as confirming the safety and retention of the hosted files.  

Moreover, Storj Labs uses a unique Tardigrade software installed on node computers to create and secure user data. With this network of anonymous nodes, the need to trust cloud storage service providers to secure the privacy of our data no longer exists.  

The STORJ Tokenomics  

The STORJ token is an integral part of the decentralized cloud storage network. During the switch of the Storj network from Bitcoin blockchain to Ethereum, over 500 million tokens were circulated to replace its former SJCX tokens. Further, almost 75 million of the tokens were burned after the token sale hosted by Storj Labs. Currently, the total tokens available in circulation is nearly 383 million.  

Use cases of the Storj Token  

The token is a key element to the network design, the primary function of STORJ is to pay other users on the network to store their files. STORJ tokens facilitate a quick and easy way to transfer value between those who provide storage capacity and bandwidth to the network and those who utilize the network to store and retrieve data. Moreover, users who are looking to sell excess storage capacity and bandwidth can gain additional money from these resources by just accepting STORJ. The Storj token is also used to incentivize nodes offering resources and securing the network, it too serves as a mode of payment for commercial storage services. The STORJ token operates on the concept of the Ethereum blockchain, which allows decentralizing the Web3 app.  

The Future of Storj Blockchain Network  

In this data-driven world, one of the main attractions of the Storj network is that users can buy, sell and control their data independently. This way, the platform strives to reclaim a service currently provided only by corporate giants like Microsoft, Google, and Amazon. Security and privacy-oriented features are yet another alluring feature of Storj. Users can store their files securely without worrying about the intervention of any corporate entity. This significant use case will continue to draw several potential users to the Storj network.  

In the future, with more users joining the decentralized evolution, Storj would position itself as the go-to platform for storing and transferring data securely, claiming its place as the ultimate decentralized file storage solution. 

Risks Associated With Storj 

Storj has a significant disadvantage when it comes to payment mechanics because storage is required to be paid in STORJ coins. This is a disadvantage because STORJ is highly speculative, and its value can change significantly in a short period of time. A look at the token’s price chart would give an indication of the volatility of the token. Storj also faces stiff competition from other decentralized cloud storage space players such as Filecoin and Sia. 

Due Diligence  

Prior to listing Storj on the VirgoCX Platform, VirgoCX performed due diligence on Storj and determined that Storj is unlikely to be a security or derivative under Canadian securities legislation. VirgoCX’s analysis including reviewing publicly available information on the following:  

• The creation, governance, and location of Storj and/or its primary development team; 
• The supply, demand, maturity and liquidity of Storj; and 
• Legal and regulatory risks associated with Storj.  

Statutory Rights under Securities Legislation 

VirgoCX is offering Crypto Contracts on crypto assets in reliance on a prospectus exemption contained in the exemptive relief decision Re VirgoCX Inc. dated May 30, 2022 (the Decision). Please be aware that the statutory rights in section 130.1 of the Securities Act (Ontario), and, if applicable, similar statutory rights under the securities legislation of each other province and territory in Canada, do not apply in respect of the Crypto Fact Sheet to the extent a Crypto Contract is distributed under the prospectus relief in the Decision.