Siacoin is a Peer-to-Peer and Enterprise grade decentralized cloud blockchain platform. The concept behind Sia is to provide opportunities for renting out storage from a decentralized storage provider, where users can rent out storage to their peers. Sia will only store the storage contract which is made once two parties reach a consensus on storage issues and defining the term of the contract. When a user enters into a storage contract with their peer, they are taking on the role of a host and thereby agrees to store data for the client and submitting proof of the continued storage in a periodical basis until the contract expires.
Sia is implemented as a blockchain based altcoin. Siafunds are the revenue generating mechanism for Nebulous Inc, the company behind Sia. Users are rewarded with Siacoins, for offering hosting services. The use of the Siacoin cryptocurrency eliminates any point of failure and ensures highest possible uptime. This kind of innovation sets them at par with other cloud storage service provider.
The host is compensated using tokens for every proof submitted and penalized for missing proof. All the proof are made publicly verifiable so network consensus can be used to enforce a storage contract. For the sake of availability, bandwidth, and quality of service, Sia recommends that users store data across multiple hosts. The network uses erasure codes to enable high availability without excessive redundancy. The network is planning to partner with Bitcoin on a two-way peg system.
Siacoin is quite different from Bitcoin when it comes to transactions. Siacoin uses an M-of-N multi-signature scheme as opposed to the pay-to-public-key-hash and pay-to-script-hash. The scheme approach taken by Siacoin is an added measure taken to reduce the complexity and attack surface. The network may also extend transactions to enable the creation and enforcements of active storage contracts. The extensions that may be performed to achieve this are; contracts and contracts updates, and proof. Contracts are tools for declaring the intention to host a specified size and hash. The contract defines the regularity of submitting proof of the continued storage. Already established contracts are thereby required to be updated regularly.
There are certain conditions set by the network that must be met before a coin is cleared to be spent. They are known as spend conditions. Some of the spend conditions include a time lock and sets of public keys and the sum of signature required. No transaction can be furnished by coins which have not met all set conditions. The spend conditions are hashed to create the address to which the coins are sent. These conditions are hashed into a Merkel tree whereby the conditions including time lock, the number of signatures, and public keys, act as the leaves. This allows parties in this network to selectively reveal information on their spend conditions.
What is Siacoin blockchain? Pros and cons: