What is decentralized storage, and why is it important?

Decentralization is the process of giving control of an activity or organization to more than one local office or authorities. The term “decentralized storage” refers to a network where files are stored on multiple computers, or nodes as shown in figure 1. When you need a file, you can request it and get it, just like traditional cloud storage. 


Requesting your file works in a similar way to BitTorrent and other P2P clients, where you can download parts of a file from other users until you get the whole file. However, this does not mean that those whostore your files can read them. Decentralized storage encrypts files and only you hold the encryption key to access it, ensuring that only you can read your files and information. 


In addition, through a course of sharing, no one person holding your documents has the total amount, finally adding another level of safety and insurance, this is due to fragmentation, or better known as sharding. The concept of decentralized storage suggests that information dissemination and recovery are conducted by nearby peers who have not thought of the exact location. Because of this, the network bandwidth is used, which results in faster userability.


What are Decentralized Storage Systems?


Users can store data in decentralized storage systems regardless of central data silos. In addition, the combination provides more protection as well as security than the centralized storage systems. Furthermore, it uses peer-to-peer communication among staff and data managers. As a result, it helps secure your information during the storage and transfer process. 


A peer-to-peer network or blockchain-based system is usually used. As a result, anyone who are participating in the network are rewarded in tokens, commonly referred to as cryptocurrencies. In addition, issues rejected by traditional collection systems are addressed by Decentralized storage systems 


  • Initially, the distribution of data across different sources makes hacking more difficult. 


  • The nodes are used to distribute files to multiple locations (usually the nodes closest to the user are selected). As a result, a hacker cannot keep a copy of the entire file, but instead would only be able to access a small fragment of a user’s data.


  • It also reduces costs by making better use of existing information. 

The most important thing is that multiple copies of the information in different nodes help to avoid the installation on the central server and speeds up the uploading/downloading process.


Decentralized storage systems, such as a blockchain, divide users’ files into encrypted chunks and share their storage with a number of participants in a geographically and organizationally distributed network. 


There are many benefits that can be derived from this, such as:

Figure 1 – (Adwani, 2022)


How it works?


A decentralized storage network combined with a blockchain is a collection of data that is divided into separate collections called “blocks”. Each block is encoded with a unique identifier or public key. Blocks are distributed among different systems and nodes. Therefore, “sharding” refers to the distribution of information on the network. Most importantly, the data is not stored in the blockchain by the blockchain-centric storage solution instead it allows groups of people and users to integrate, store, and offer the service to the data storing users. 


As a result, many small businesses can use the network by either providing capacity and storage space for data, or access other user’s storage capabilities to store their information and data. 


In addition, the database does not contain any personal information of the user. From the entire file, the miners only get nanoscopic information, or parts of a user’s information and data, instead of the entire file itself. As a result, confidential data can be protected through special storage methods thanks to this system. 


During data retrieval, the data also goes through an authentication process, the system uses data processing and load balancing to speed up the transfer and storage of data. Users do not suffer any data loss due to failure on one device, as a user’s data would have been duplicated, fragmented, and stored among multiple machines to prevent this data loss from occuring. 


Importance of Decentralized Storage Systems


A decentralized storage system plays a vital role in distributing and storing the data. It is important because of:


Low cost to store

Decentralized storage options are cost-effective due to the lack of capital outlays and complex/expensive server centers. This means that users can store their data for a small fee. There can be millions of nodes storing your data, which means more storage space can be utilized. As a result, costs are significantly lower than traditional cloud storage solutions.


Fair Market Price

Fair market prices can be achieved due to the constant competition between nodes, which includes the fact that only the highest will survive in this competition.


Fast Speed

If the amount of traffic is greater than the network can handle, typical client-server connections often experience bottlenecks. Many copies are stored on different nodes thanks to the use of P2P technology and the elimination of a central server. This allows you to get more copies of the data and speed up the upload/download speeds.


Less file loss

With millions of participating nodes, additional copies of data can be stored in case of errors.



Decentralized peer-to-peer distribution does not have a single point of failure. Many nodes may be down or have data loss, but the network continues to operate as if it were online.


Data Protection

Information security is more important than ever in today’s technological economy. Data breaches, identity theft, and other problems caused by insufficient data storage often result in high costs for users and companies as shown in figure 2. For example, peer-to-peer networks that are isolated are more secure. Because of this, they are good for protecting important information from malicious parties. Hackers must gain access to each node in order to attack a specific user. Hackers are often dissuaded from trying to steal your information by the high costs involved in exploiting this vulnerability.


Figure 2 – (Shrestha, 2021)




In conclusion, you can now understand the importance of a decentralized storage network. In the future, we will begin to see more adoptability as the technology and systems begin improving.


Eventually, we may live in a world whereby there are automatic features that enable users’s data and information to be stored onto their own personalized decentralized storage blockchain systems.



Adwani, K. (2022). Decentralized Data Storage – What is it and How Does it Work? (FileCoin, Storj, Internxt). [online] Available at: https://kripeshadwani.com/decentralized-data-storage/ [Accessed 27 Nov. 2022].

Shrestha, O. (2021). Implementation Of GDPR With SQL Server And Azure SQL Database. [online] Medium. Available at: https://ojashshrestha1.medium.com/implementation-of-gdpr-with-sql-server-and-azure-sql-database-fe710e177c59 [Accessed 27 Nov. 2022].


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