Epicenter - Learn about Crypto, Blockchain, Ethereum, Bitcoin and Distributed Technologies - Shawn Wilkinson: Storj – The Decentralization of the Cloud

Episode Date: October 15, 2014

Shawn Wilkinson, founder and lead developer of Storj, joins us for our first deep dive into a decentralized application. Storj’s particular domain is the decentralization of cloud storage. Their applications allow users to store their files in a decentralized peer-to-peer network that promises to be more secure and effective. At the same time, it creates a market where people can earn money by renting out spare hard disk space. Topics covered in this episode: Why cloud storage lends itself to decentralization How the efficiency of Storj compares to conventional providers like Dropbox The architecture of Storj including the applications Driveminer and Metadisk How Storj interacts with protocols such as Counterparty and Ethereum The Storjcoin X crowdsale and its economics Episode links: Storj Metadisk Metadisk Beta Driveshare Stroj Talk Storj & Metadisk whitepapers This episode is hosted by Brian Fabian Crain and Sébastien Couture. Show notes and listening options: epicenter.tv/046

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My name is Sebastian Couture. And I'm Brian from in Crane. Today we have a was Sean Wilkinson. He's the founder and lead developer of storage. So we've written storage A. We've talked about decentralized applications a bunch of times in this show. We've had Ethereum on twice or just recently we had the Coinify with Tom Ding where we talked about this. But this is the first time we're actually having someone in charge of a decentralized application on.

and I'm super excited that we have the chance to kind of dive deep into an example of that and hopefully we'll also get your understanding a bit better actually the promise of decentralized applications in general. So hey Sean, it's good meeting you. Hello. Thanks for coming on. So where do you want to get started first? I'm here to talk all about storage and where do you want to start? So actually what we thought would be interesting would be to hear a bit about your background before we get sort of dive into storage so can you tell us how did you get into bitcoin and how did that lead to ending up in storage sure sure so i started with bitcoin

about 2012 i had a friend that was mining so that's a cool thing i'm not using my GPU for anything else so i started mining as well a nice little six nine 50 then i said and That's making my room too hot. It's making all this noise. I stopped mining. And then Bitcoin kind of gained a little traction. I came back and looked at it. It said, hey, this is actually a pretty interesting concept.

So about 2013, I get involved in Bitcoin core development. I started building up some of my own Bitcoin projects doing a little bit of freelancing. And then I ended up working for Bit Shares about the end of 2013, beginning in 2014. and then I left from there and started working on storage. So my own decentralized cloud storage platform that kind of incorporated all this Bitcoin stuff, all this blockchain technology into an existing ecosystem. And I have a traditional background in CS, so I got my bachelor's in computer science from Morehouse College this year.

So I kind of look at Bitcoin and the blockchain as simply tools that you can use for other platforms and other things. And that's where they kind of came together to build storage. And so you're based in Atlanta, right? That is correct. That is correct. We have BitPay down here, Bitcoin Magazine, Camp BX. So it's a nice little place.

I understand you just got back from a little trip in Las Vegas where you were attending a couple of different conferences. Indeed. I did a triple conference. I went first of the coins in the kingdom in Orlando. Then I went to coin agenda. Well, I caught the edge of. inside Bitcoins.

Then I went to Coin Agenda. Then I went to Hachers United. So those were all in Vegas. So just got back today. Actually, I got back from the airport a few hours ago and ready to get back to work. Awesome. All right. So where do you want to go next?

I guess maybe a brief overview of storage and what it does. Yeah. Tell us about storage and perhaps about the company as well. Sure, sure. So storage is a decentralized cloud storage platform. Basically what that means is we want to build a file storage network where you can store your files, your videos, your pictures, or whatnot on this network that doesn't have any central controls like a company like Dropbox or Google Drive. Because once you start getting to centralized companies that manage your data, you hope they would be a good steward for that. But it turns out there's all these different privacy and security problems.

There's, you know, A, the case where they give access to the government to peruse through your files like Dropbox. We saw that with kind of the prism leaks and the prism information. And number two, there's just like security breaches. So they just failed to protect the file. So we saw what the other day, a day or two ago, that Snapchat, a third-party application through Snapchat got hacked, and so all these photos and media got exposed. So the idea is that if we remove the company control,

we remove that central point and only give the users access to the file, so they only have the passwords to those files and not a company or nobody in between, then it's a lot more secure and private. The other thing is, since this is a network, a peer-to-peer network that's made up of users, we essentially, instead of having a central server farm or a central server, central company, we actually have the users contribute space to the network,

and so they can earn money, they can earn cryptocurrency for doing that. So it's really about building a cloud built by and for the users where they control it rather than a company or a centralized entity. So we think that's a lot more efficient system. It's faster, it's cheaper, it's more private, more secure. So that's a general summary.

It sort of sounds similar to the promise of Bitcoin. So when you say that, you know, centralization essentially is the issue with cloud storage. It's a lot of the same problems that we experience in the financial sector, right? So a lot of that overlaps into the storage space, I guess. Right, right. So yeah, you have Bitcoin whose value proposition and say, okay, here is, a medium of exchange, a currency that is not controlled by any central bank so they can't print it off or whatnot. For storage, you know, you have a value proposition along the same lines where,

okay, it's a storage network where you have control your files, not a company. And so that there's a whole bunch of other things that come with that, that really make it stand out in terms of features and pricing and security. So, why are you? Why are you? do you think that storage and a cloud storage lends itself so much to decentralization? Is it that it makes available those resources for the first time? Do you think it's the efficiency? It's a trust. Can you go into this a bit?

Sure. It's all of those things, really. I mean, you could simply sell it on feature sets alone. So think about Amazon S3, a large, large cloud computing and storage interface for the entire internet. And they'll have a switch failure and a quarter of the internet will go down because Amazon web services down. So, you know, people are losing money. They aren't so happy. Versus, if you look at Bitcoin, when has it gone down in the past five years?

Do you know the numbers on that? Can you guess? probably none well probably not so we've had some hard forks and some network but it's a total of maybe four or five hours for the past

five years and so that's that's a pretty good up time measurement so in terms of decentralization you start to eliminate failures in the system then you get into

portions again it's aspects like privacy since there's no central server there's no central thing to essentially hack or expose or get into. So you could have a relay node in the network that gets destroyed or hacked or whatnot. It doesn't matter because you can't read any of the intermediary information. So let's say a miner goes down or it gets broken into. It has no effect on the Bitcoin network.

Same thing for the storage network. Particularly node gets shut down or hacked or falls off. awesome server rack has no effect on the network because it's just routing that information through is providing an additional portion to the network. But you really have to destroy large amounts to the network to have really any effect. So let's kind of take this what you've been talking about and go a bit into the architecture of storage. So as far as I understand, right, on the files essentially get cut into pieces and then stored by a whole large number of nodes in the network and then there's the redundancy aspect. Is that correct? Correct. So let's kind of step through

the lifetime of a file on this now. So you have let's say cat.jpay and you want to upload it to the storage network. You want to store this awesome cat picture that you took. So you take this file, it would go into the client software sitting on your computer. It would encrypt that file with keys that only you control. It would split that file into multiple pieces using erasure encoding. And then it would distribute those broken up encrypted pieces to multiple people on the network. So the idea is that you have, let's say, for example, three people who are hosting the redundant chunks of these files. And so if one goes down, no big deal, the network's going to check that and say, okay, that person who is supposed to be hosting that chunk is not there

anymore, so we can recover that from the existing chunks. And so from that portion, we have all these files or bits of chunks flowing around the network. It's encrypted on your computer, so it doesn't matter who's listening on on the data connection or who has a chunk of that file. It's encrypted. They have no idea how the pieces go together.

On the other side of that, you want to retrieve that cat picture, and essentially maybe share it with someone else. So you take the hash of the file, so this is the identifier for the file. So

it's just broken up in bits and pieces spread across the network. So we have these identifiers for the file so we can find these pieces. And then we have the keys so we can decrypt them and put them back together. And so I have to keep these myself or if I want to share with a friend, I share him the identifiers and the decryption keys. And then either of us can go to the network, retrieve these files and download and decrypt them. And so there's no kind of problems in terms of middle methods. or people stealing or hacking the files because, again, they don't have access

to the decryption case for the file, unless you share it with them, and they don't necessarily know how these pieces fit together. So that's kind of a general overview of the lifetime of a file as it goes to this network. Now, one of the cool portions of this, it's a peer-to-peer network. So one thing people kind of question about is speed.

So essentially, it's the speed of a peer-to-peer network if you've ever used Torrance or BitTorrent. You know that this is quite fast. So you have a file that you distribute it out and you have it spread around all these people. Well, you can download all those chunks back simultaneously. So under scale, essentially, you can retrieve that file back.

The bottleneck is literally your connection. The network is going to expand and scale. What about the connection speed of the people hosting your file? you'll depend on those as well, no? Well, no, it'll add up like a Torrent network. So essentially, I can be downloading this piece from this guy and this piece from this guy and this piece from this guy

all simultaneous. So you kind of add those connections speeds up. So I had a question about that. This is something that I thought about a lot because typically when you use BitTorrent, your connections speeds are quite fast because you're downloading from so many different parts at once, right? So is this sort of speed expected?

on storage? So there's two things that are rewarded in storage. One is actually physically storing the files and you're cryptographically proving to the other person or to the network that you're storing

those files and you get paid for that. Two is the bandwidth portion. So you're essentially getting paid for transferring that file to someone else. So in terms of that there's this competition to say, hey, I want this file, these guys are storing it, these guys are wanting to get that file to me as fast as

possible because those are the ones that are going to get the payment, those are the ones that are going to get the reward. So it's up for the people who are, we call farmers on the network who are providing this resource to essentially compete and get that file to you as fast as possible. Okay, so there's, in fact, some sort of a competition going on between different farmers or, I guess, storage providers, maybe another way to call them. to provide you those files as fast as possible, and those who can provide them first get paid? Correct.

Okay. Is there a blockchain somewhere, Indo? Yes. So we make heavy use of the Bitcoin blockchain, and we're also experimenting with some other blockchains. So essentially what we're using now in terms of the Bitcoin blockchain is we have storage coin, which is a counterparty asset,

and of course counterparty is running on the Bitcoin. So that is the cryptocurrency that we use for buying and selling space inside the storage network. And then we have other use cases in terms of using the blockchain to keep track of files where files are, to transfer encryption keys and various different methodology that we use the blockchain. Okay, so you use the blockchain for different aspects such as sending money to pay for the service provided, but also to send information or to store the information of like where are the files? The files themselves are not storing the block.

Yeah, I know, but the location or... Correct, correct. So we use the blockchain as a mediation method and also know where the files are, what's the state of them in the network. But we don't just use the Bitcoin blockchain. We're exploring other blockchains as well that we can use. because we can use multiple blockchains as ones. So for that, those other things, such as like, you know, the mediation message,

like communications between different nodes, I presume are you also using counterparty for that or is it its own separate storage block chain? Can you go maybe a little bit more into that? Sure, sure. So there's many, many different types and many different applications, many different use cases. So essentially, we can use the Bitcoin blockchain as that, you know, cryptocurrency method and use that other platforms to essentially keep track of the files. So essentially, the way we're building out storage is kind of one step at a time. And so we're looking at some of the existing technology that we have out there in terms of building out mediation methods and whatnot.

And so we can have oral curls or whatnot enforce those mechanisms. And those work to a degree. But we're also looking to some future platforms that are being developed like Ethereum and whatnot to build out contracts to essentially make the data that work smarter, to be able to have not only essentially service level agreement. So you say, I'm going to have this file and I'm going to provide this level of uptime for this particular file and this speed. And so you do that, but you might need someone watching the network or some kind of Oracle to enforce that. But then we can start making that easier and start using things like Ethereum and something. some of these other smart contract platforms to make them more enforceable.

So we can work on every level, but essentially there's some portions that can use some of these future platforms to make it easier for us and essentially add to the feature set and add to the cool stuff we can do. So it really depends on a particular use case. You can give me a specific one I can dive more into it or we can just leave it at the kind of the general stage. So, Sebastian, you said you tried it out today. Yeah, actually, well, I mean, I just sent a file to Sean actually before we started this.

Yeah, so we have two applications that we're working on. So I was able to upload a file quite simply just by drag and dropping it on the web interface for the beta of Metadisc. Correct. So we have two applications that we're working on Metadisc, which is kind of your drag and drop, web version of Dropbox, and then DriveShare, which allows users to sell their hard drive space to the network. So Metadisc has kind of been floating route there in a kind of alpha beta stage.

And we're continuing to work very hard on DriveShare and getting that integrated in. So we have some stuff floating around that people can play with. Now is this version of Metadisc that's online right now? Is that something that people can use today? I mean, can we

get this URL or not? Yeah, yeah. So the URL for Metadist is node1. metatist.org. I wouldn't recommend it for storing all your super important files on there. It's a very, very rough development beta that we're constantly playing around with. Of course. You can use it if you want to share a file with your friend or like cat pictures. Don't look at us if it gets deleted through some kind of development update or bug or whatnot.

So you can try it out. Just don't rely. I want to kind of go into these apps. So essentially this Metadisc app is going to be the first real version of your decentralized Dropbox platform. It's very nice. I mean, it's a web version. So you can essentially drop a file in there. And then you've got the link and you can copy that link to somebody else. How do you see things evolving?

Do you see? Because, I mean, that's not really how people use Dropbox today. People use Dropbox and Google Drive as a syncing service for them to kind of back up their files on the cloud and have sort of the same file structure that they would have on your hard drive. Is this something that you see happening in the future with storage? Yeah, so essentially we built on an API and then we built that application on top of it. So that's just kind of a sample application. So we can drag and drop files and kind of use the network and get things started.

But we really see other kind of applications in terms of decentralized videos. decentralized audio, decentralized images, web services running on the storage platform. And then people building out, or us building out apps that more function like Dropbox, that use the existing APIs that we use to build that application, but instead making a more syncing application that you're used to. So we're working on building some of those things out. And we really have the platform and the API to do that. We just sit down a little bit more and actually physically code.

that sinking portion on top. So even something like a decentralized web hosting, is that something that could be done? Yeah, so that's actually one of our major pushes. So in terms of that, the thing that we're trying to focus on first is media. So images, video, audio.

So you can particularly have, you can store your content on storage. You can have the storage network serve that content. and so we're also looking at ways to also embed web pages in there. Is that performance-wise, how is that going to compare to web hosting services people use today, whether it's like running their own server or to something like Blue Hope? So we see it best using our current methods and APIs as almost a CDN or a content distribution network. So you can essentially run just the static pages and the database stuff off your own web host, website, server, be it a small one or whatnot.

And then we take care of all the backend assets that take up a majority of the processing power and space and whatnot. So in terms of that, we really see it's starting to replace some of the content services, because of the feature sets it involves. So let's say YouTube, for example, there's inherent takedown notices and whatnot. You'll upload a particular video and some copyright institution, whether or not that's a valid take down or not,

they'll remove it. So you have censorship within YouTube, and a lot of people don't like that. So we build out, and we have demos of this, on our website. If you look at our form, we did a little app contest

and people built these apps out. So you can have a decentralized video player that's running on your website that doesn't go to YouTube but goes to the storage network. So that particular file that's uploaded can never be taken down or destroy it or whatnot. The other person is the fact that it's running on a peer-to-peer network

so that file can be distributed to a server or caching server that's geographically close to the users. And we can distribute it all over the place. And this kind of auto scales and all balances itself. So you can start getting really good performance out of just average users that really don't care about the privacy or centralization or censorship aspect of it. They're just like, okay, my download is going a little bit faster.

Because that person who's serving it is down the street, rather than in some data center a long ways away. So we see both application developers kind of using it for the platforms initially for the content distribution and then starting to get into actually serving full web pages and full content through the network. So I guess there's a potential here to disrupt a whole lot of different types of industries, right? I mean, you can disrupt YouTube, you can disrupt Spotify, you can disrupt,

you can disrupt the whole CDN industry essentially, you know, with this kind of thing. Right, right. So you have to start thinking of storage, not as a singular application, not just a decentralized Dropbox, but a platform that allows things like that to be built. I definitely see it as more as just of a decentralized Dropbox. But how do you foresee that this will happen? How do you plan on enabling people to develop these apps on top of your platform? I think that's a core component of being able to develop this,

is providing that platform for people to come on, easily learn the API, and develop apps on top of that. Do you think of sort of like an app store or something where people can develop apps on top of storage? What do you see there? Sure, sure. So essentially, that's what we're building out through Medidus. So Menadis is kind of our full. full node, full access to the network, application, and co-bates.

So one of the things that I saw with Bitcoin is that it was very hard to get into development and very hard to get it running and syncing and all this kind of stuff. So when I was starting to design storage, I said, hey, instead of having this be some specialized client, let's build it into an application that can run on the web. And so any old programmer that has at least some semblance of an idea how to work an API can connect to any one of these nodes or run it himself and start to develop applications for it. So we don't particularly see an app store for this, but we particularly see people essentially taking the storage software and white label here. So they'll take the storage software as a back end to store all their data for a game. or some kind of application,

and then they'll essentially have a product built on top of that. So we don't necessarily care about people, you know, sticking the storage name on it, just that they're using it as a back end. They're using the network. There's a question, actually, in the chat room. Somebody is asking if you could build a relational database, like a MySQL database on top of storage.

So that's kind of like on our wish list. There's essentially what happened is with current blockchain technology, it's very hard to do that in a scalable manner. So I can have some content like a picture or a video on there, and I can insert that, and I can get that around the network. That's a more immutable source of data. That's a static source of data. Once you start getting into relational databases, you essentially have to make things highly

mutable and highly scalable and make them very fast. You don't want to make a database query, and then it takes a database query. takes like five minutes to execute. So in terms of that, there's other blockchain technologies that we're looking at. And we're working with, I think, my tables on this and some other people to kind of figure out this concept of how we can take this blockchain technology and make it fast and be able to have wrappers and APIs to be able to make these database systems that are decentralized, have no central points of failure, have no central company, and run off something like a

blockchain, but the technical portions of how we do that specifically are still kind of being thought of still kind of being worked on. The current blockchain technology is not quite there to get a very fast and very scalable database. So if other people will kind of white label storage to run their own applications on that, does that mean they will use the same is the same blockchain, the same currency, for example? Correct, correct. Okay. So I guess in that sense, it is sort of like you saying,

what you mentioned before, that essentially storage provides an API and then people write their applications on that, that may have whatever kinds of looks on the front end, but on the back end, it's this one network of peers, I guess, in a little bit like, counter party built on top of Bitcoin, but it's the same nodes, the same mining.

Right, right. And that introduces some cool features. So you can have someone who makes pinkbox.com and someone makes redbox.com. And essentially, someone can store files on Pinkbox, which is this completely other application, and then retrieve it on Redbox.

So it adds some cool interoperability between the applications because they share the same underlying data platform. That is cool. So that's something you can never do with something like Dropbox and Google Drive. You can't store a file on Dropbox and then go ahead and retrieve it on Google Drop. Oh, that is brilliant. So if you'll be like using Dropbox, you say like, I'm tired. I want to switch to Google Drive.

And all your files are already there, right? You just switch over. Exactly. So then we start to get into the cool market aspects and competition where people are using the same underlying network, but now they have to compete for features and all this stuff adding on top of it. And if they don't keep the users happy,

they don't keep those features sets up. It's easy to switch. Two seconds later, I'm just going to go to the next website and all my files for you there. So it really encourages people to build out cool applications to grab the storage users' base attention. What else do you think will happen because of that interoperability,

that perhaps today we can't even, like, really seems unexpected or something that wouldn't be possible today. I don't know. It's kind of all up for grabs. We're just kind of building out, you know, this tool set. We're building the hammer and giving you some nails and saying, good luck, figure it out, build some cool stuff. And, you know, there's, there's, I'm pretty sure a couple of years ago, we couldn't even thought. But just look at Bitcoin in 2009. We've even predicted all the cool applications and use cases that we built so far and are trying to build when Bitcoin just came out. So I think it's the same way with storage.

We can't really speculate on all the cool stuff that we could build. But we definitely know there's some cool ideas out there. So these are sort of the user-facing apps, right? But I'd like to come back to DriveShare and this proposition of being able to sell your hard drive space essentially on the storage network. This opens up I guess even some new

business models because now as just as a guy who's got a computer and some storage laying around I can sell my storage online but I can also as you've talked about in some of your blog posts get a VPS

and a virtual private server and rent out some space on there. So can you elaborate on that? Sure, sure, sure. So there's like, really two people were trying to sell this on,

at least initially. So A, the people who already do mining, right? They understand this, coal, cryptocurrency, mumbo-jumbo stuff, and they know how to run the applications and make it work. So in terms of that, you kind of want those people

to start running this kind of drive-share software, which is, really cool value proposition. You say instead of doing all this hard computational work and this crunching hashes, let's take this resource that we have and let's sell it to somebody else on the

other side of the network and earn coins that way. The other portion is, you know, the average user who's going to like, oh, I can earn money selling my hard drive space, downloads and applications hits Go, and he's earning cryptocurrency. So the cool

thing is it adds, it looks lowers the barrier to entry to the cryptocurrency market. So for Bitcoin, you know, you're not going to earn but a penny trying to mine on a regular computer nowadays. But for an average user, they could earn a couple of bucks of cryptocurrency and kind of get their feet wet in terms of storage and farming. So there's kind of two aspects of them, two user groups that we're trying to initially appeal to. Can you talk a bit more about the profitability? Do you think it will actually be, do you have any ideas? So let's say I have 50 gigabytes on my hard disk that say like I can make that available.

What kind of what would I expect? Like that be a few dollars a month or more than that? Sure. So if you look on our website, driveshare.org, that's dryshare.org. we have a calculator that you can put in the number of gigabytes and select a rate or a cloud provider equivalent and hit go and it'll give you like the estimated cost for month or the estimated earnings for month. When you start to doing research into cloud storage, you start to find how much these guys overcharge for their services. It's actually anywhere from 10 to 100X. So if you look at a provider like EMC,

they charge, last time I looked, about $3,000 for a terabyte. So you can go to Best Buy and grab a 2-Dibide drive for 60 bucks. So when you started to actually crunch these numbers, there's these huge margins that these guys are operating at. And one, it's for a profit motive. And two, they have a lot of costs associated with it, right? They have servers, they have employees, they have maintenance, they have heating, they have cooling, they have electricity, the insurance, investor profits, building space. All these things factor into those costs.

For the storage network, we eliminate all those. You just download an application, hit go, and that's it. So we've eliminated all these, these costs and these profit promotives that, you know, these large corporations charge because they've really cornered the market. So at least for the people that participate initially, I think they'll be quite happy with the amount they earn. So everything's based on a market in our ecosystem. So you have your renting out your hard drive space. you're setting a price that you'll sell the hard drive space for, and someone on the other side of that will set the price that they want to buy storage space for,

and so you meet on a market. So you want to make it less of a singular application or singular use case. It's a market for data. And so those tug back and forth to get good price discovery and good pricing based on demand. Do you think it would mostly be people seeing an opportunity there, and then renting space on, for example, Amazon or other cloud storage providers, and then making that available on storage, or will it be people having space on their own computers at home?

I think it will be both. So it all depends on kind of the demand of the network and the need of the network for data. So in terms of that demand for data might outpace the amount that people can share on their hard drives or physically plug in. So then you'll look to external services to kind of augment that as that begins to grow. So it'll be a mixture of things, all trying to cater to this market demand of people who want storage and are buying it from the network. Now, you make some projections as to the types of profits that you could earn by selling VPS storage. So essentially, you have a cost of about $635 per month. You could make a gross profit of $8,000 per month.

Am I reading this, right? So if you look at, so it's, again, it's decided on the market prices, it's decided on the demand. We have, like I said, a calculator on there that what we do is, is compare it against different cloud storage providers. So we say this amount of gigabytes you have, this is the rate of Dropbox or Google Drive or all these other services. So you can kind of estimate, okay, how much would they earn, how much would I earn, how much would I price on this market?

So I can't predict a market. Of course. If I could predict a market, you know, I'd be buying and selling Bitcoin thinking, you know, millions of dollars and I'd be off on my God. So we're just providing a flexible platform. And the market will decide what the market is. Of course, if it's true, right, Sebastian, like the numbers you were reading out,

then what we'd expect is that lots of people come in, start offering storage space, and the price would be driven down to, I guess, the marginal cost of people, you know, providing that. Yeah, so that's essentially what we would hope. But the thing is we have to think of is the cloud storage and computing industry is a $150 billion industry. So essentially we have to saturate that $150 a year

dollar industry before we start driving down the cost. And so at that point, it's a lot bigger than Bitcoin and a lot of other portions in the script of currency space. So the cool thing is, unlike mining for farming, there's existing demand. There's two dozen use Dropbox or Google drives or any of these cloud storage companies to store their data. and even large corporations are using massive portions of data.

So there's huge billions and billions of dollars of demand that we have to cater to first before we'll even start to drive down the prices. So we can still make those nice 10x, 100x margins that all these other cloud providers make, at least in the early stages. What would be interesting would be much like a lot of the financial industries starting to now wake up to Bitcoin and perhaps even taking advantage of some of the technologies themselves would be for large cloud storage and providers like Dropbox and Google and Amazon to also start doing this kind of thing and also start operating storage nodes.

Yeah, I agree. It would be a nice welcome change for them to start to pay attention to privacy and encryption and all these other portions that we bring along with. Doesn't seem very likely to happen. Huh? Yeah, but it's very unlikely that a several billion dollar company is going to completely change their business model. But hey, they might.

And I think it would be great for all. Now, let's get into the crowd sale. So there was a crowd sale that started, I guess, a few weeks ago that's now ended, correct? Yeah, yeah. So we had a crowd sale around August-ish, and that's now since ended. We raised 950 bitcoins as a portion of that. So a nice decent chunk of change. So essentially the value proposition for that is that you participate in the crowd sale,

and from that, you get early access to Medidus, drive share, and then you get some storage coin so when the network starts up you can buy and sell some space in the network. So those were kind of the three value propositions of the crowd sale. So people that way bought some storage coin. Can you tell us a bit about, you know, how many storage coins were given to people that way, how many exist overall right now and how is that going to develop in the future? Sure, sure, sure. So in that portion, a lot of people are signed up based on their contributions for early access.

And then the other portion is we have about 41 million tokens that were bought or purchased via the crowd sale. And that is, it's worth noting that that is our first crowd sale. So I think we're one of the only people who were in 10. to essentially do a multi-round crowd sale. Okay. So we kind of want people to see and actually play with and actually use the software before they really start saying, hey, this is, you know, something that I actually want to purchase tokens in

or early access to. So we don't want to get into the whole butterfly labs. Yeah, yeah. Kind of never deliver Mount Gox kind of thing. So we can kind of start out slow. people can see our progress, people can see things coming out. And so we can give them another portion to be able to participate in the crowd sale once they say, okay, this is viable.

This is not just some crazy far-fetched kind of thing. So that's why we're kind of doing a multi-round process and that allows us to kind of mix rewards based on what we're working on. Yeah, which is curious, because in a sense it's like you can think of a search A as a startup, right? I mean, it's not too different, although in some ways it is a very different, right, because it's a decentralized thing. And it's interesting to just see how these economics work. And, you know, I think Ethereum is one where like a lot of people looked into it, a lot of people, you know, it was because it's so well-publicized, such a big project. So I'm curious to sort of understand here as well.

So let me, let's go into that slightly more detail. You mentioned that 41 million tokens are sold in that first round. Does that correspond to, let's say, 10% of all the storage coin or storage coin? Is there some valuation you can attach to that? Sure. So essentially, we've hard-capped the number of storage coin that there's ever going to be at 500 million storage. Okay. So you can do the percentage calculation on the percentage of tokens.

15% of those tokens go to the developers to spend on apps and development and documentation. And the other portion to that that no one's done is essentially 15% of that also goes to the community. So those funds are controlled by community members that were voted in to essentially spend those funds for marketing or promotion or billing. apps. So I always thought it important that the people in the community, be it the developers, communities have some kind of token or usage to be able to promote adoption, promote development, via bounties, and all those kind of portions. But the problem is that I saw working on the projects is that only the developers would have these tokens, right? Only the developers would have some X percentage or whatnot.

And so the community leaders or the people in the community would have all these cool ideas on stuff they wanted to do, but they would have to ask the developers permission to be able to do that. And so I was like, no, no, no, no, no, let's give the developers some resources, but balance that by the exact same percentage for the community to have the exact same amount of resources. the community has the exact same amount of financial power. So you don't centralize all the tokens that you use for these projects in one group. No, you have two groups with equal financial power in the storage ecosystem.

And that's worked out very well. So you would be, you know, part of the developers, right? Then 15% of the community. And then I guess about 10% of the total went to the people who, invested in the crowd sale. So how does that work with the other 60% are those sort of held in reserve for future crowd sales, as you mentioned? So I wouldn't say invested. People bought early access to software in the crowdsale. Purchased, yes. So we're not getting in terms of, you know, we're not issuing on license security and all these guys, he promised. I actually did

want to ask about that. Because I have asked a whole bunch of people who are all doing so similar things like always like how do you do that what's the legal side or are you right right so we really don't want to get into that aspect of this being blatantly issuing you know illegal securities or whatnot we develop software and so the main value proposition is crowd sale is you get early access to software so you can start mining and and use these cool applications and all these different features so that's what people are are purchasing and the tokens are kind of just the extra that's used as the fuel in the system to make it run. So you bought a car and we gave you some gas with it.

You have to go to the gas station and go buy more gas, but you can load up on gas now if you would like. So essentially that's kind of the portion to it. So the other tokens are just kind of held in reserve to be used for two main portions. One is future crowd sales that we hold. and the other portion. So that can be for the Meditas and DriveShare applications or other applications that we want resources for other developers

outside of us or inside of us to work on. The other portion is essentially early farming. So the people participate in the crowd sale. We have this pool of funds that we can say, okay, here's the resources that we want to post on the network. We want to, let's say, for example, download all of you, and stored on the storage network. So we have some tokens to be able to kind of kickstart that and get that working.

So that also means that there's not going to be like a mining and then a continual money increase because all the money that miners earn comes from people who pay for storage, right? This sort of a closed circle. Right. So that's one of the things that I highly disagree with in terms of building out resource-based networks. you have other portions and projects that essentially they have mining in them and they're just devaluing the entire network. So we don't want to do that at all.

We don't want to devalue the token used in the network by this generation when we can use other methods to secure the blockchain and whatnot. So I'm a pretty strong proponent of not using mining when you don't really need it. And for proof of resource, actually, when you start adding, and mining portions, it starts some really bad behaviors in terms of attacks that you really don't want in your network. And it adds more problems than it solves. So we thought of some really alternate distribution methods. And we used, of course, the Bitcoin blockchain via counterparty to actually secure the stuff. But we don't have to worry about this generation of

tokens. That's just, you know, devaluing everyone. So we've got a couple more things. we want to talk about, but before we do that, we'd like to talk about our sponsor. Fairleigh. Fairleigh is a Bitcoin prediction market where you can place predictions on the likelihood of sporting events, the Bitcoin price and current affairs, among other things. And if you bet correctly, you earn money. So Brian, can you tell us what's a prediction market? Yeah, absolutely. A prediction market is a site or is a market where basically parties are matched up and they can make predictions about things. So we actually have a prediction today that is super relevant to the topic we're talking about.

And let me just pull that up. So the prediction is whether in April 2015, the market cap of storage coin X or what exactly is the name? Yep, storage coin X. That's correct. Storage coin X or Matesafe coin is going to be bigger. Now, I'm actually going to ask about METAVE afterwards because I'm curious how those projects compare, but essentially that gives you sort of an opportunity if you believe more in one projects or in the other project to, you know, take a position on that and, you know, see how it goes. Of course, it would also be for you, Sean, perhaps if you want to hedge you risk, perhaps it could be something to bet on META.

I don't know to what extent those are competing. but in the end they do both provide some kind of a cloud storage solution so if you want to check out you know you can take a position there and see how things work out and perhaps it also makes it a bit more exciting to watch how this space develops um what's your prediction there Sean at the moment I know uh Maitsafe is a much a much bigger platform well at least the market cap is much higher. Sure, sure. So in terms of that,

I don't know. There's, obviously, I'm kind of biased, so I probably have to stay a storage coin. But in terms of that, a market cap is probably not the best representation. Actually, our total amount of coins is misrepresented on coin market caps.

So as we kind of build out, those will probably be fixed. So are essentially, I'll actually do, see if I can do the calculation here. But if you actually have the total amount of coins that we're actually going to have and actually be created, I think people are going to be like, wait a minute, why did they jump up, you know, 100X or? Oh, yeah, yeah, I see it because it only lists 40 million right now. Farming all those coins. And so they've entered the market. And so we have a.

a kind of jump in market cap. So those numbers aren't completely accurate that are on coin market cap right now. So anyways, if you want to take a position on that, you can do so at fairly.com slash epicenter and you'll find that prediction in the Bitcoin section. And so we want to thank fairlay.com for the support of Epicenter Bitcoin.

Absolutely. So let's actually use that as a great segue into something we just touched on now. can you talk a little bit about how storage compares to Madesafe and also there's another project called BitCloud that sounds really similar to me. I'm not an expert in these three projects, but can you run us through what the differences are? Also, so of course people who want to take a position to have some more inside knowledge. Sure, sure. So in terms of decentralized cloud storage, botulums, you should be looking at storage, made safe,

Sia coin, perma coin, and falkoan. So those are the five main portions that kind of look pretty promising in the space. So I guess that your first question was in terms of made safe. So we actually have a pretty good relationship with just about all these projects, including made safe. Actually, we've been talking to them from the very very, beginning of their kind of four reigns of the crypto space. So earlier in the year when we're kind of doing our due diligence on storage with the

Bit Angels is when they kind of stumbled upon Matesake and kind of doing something similar. So out of that discussion, they kind of sold that, you know, crypto would be a good solution for them. And so they jumped in the Bitcoin space and had a very, successful crowd sale. And here we are. So we've been talking to them from the very beginning. So we love what they're doing and what they're building.

So the difference between Madesafe and Storage is essentially they're working on decentralized internet. And we're more focused in terms of building out just decentralized storage. So they're focused a little bit more broad. They have a lot more stuff that they have to code up. Ours is just getting the storage ecosystem and area. But really, we're looking at all these platforms, including Scicoin and Permicoin and FileCoin and MaidSafe and saying, at the end of day, we mainly develop applications here at Sorge or at least sample applications that can be expanded. So if any of these particular platforms take off and is actually viable, we'd be happy to implement it in our applications.

There's, you know, we can build out APIs. How would you do that? So that depends on the technical implementation of each one. But the idea is that these are decentralized open source file storage network. So we can build APIs to make them interoperable. So we can have our metadata app and you store a file on this metadata app and essentially can plug into the storage and the main safe network. So you can take your file and you can store it on the storage network, the made safe network.

You can split in half and do both. So you can simply just increase the choices that the user has. And again, it's all open source. It's all distributed. It's all decentralized. So I don't see any kind of reason why these platforms can't work together. And we said publicly that we're going to take a non-competitive approach with all these other platforms because it's way better to just work together

and build some really cool apps that mesh the platforms and really cool features that this mesh the platforms than trying to, you know, fighter, computer, or the like. Because we're just getting starting out. And we have $150 billion to saturate. So there's lots of stuff to do and there's yachts enough for everybody.

Before we wrap up, I wanted to ask you, I guess maybe a question that's on a lot of people's minds, is how do you make money with this? Like how do you pay yourself by developing storage A and moving forward, how would your company make money? Sure, sure. So we kind of have two portions of this. A, one's the open source community side. And that's funded by crowd sales and built up by the users and developers and volunteers and whatnot.

The other side that we have to that is storage labs, which is essentially a corporate entity that's going to be entering venture fund. running pretty soon. And so essentially that's taking the storage protocols and tool sets and wrapping up in a nice pretty bow and pushing it into enterprise customers and whatnot. So think of it almost like starting BitPay or Coinbase in 2009 at the exact same time that you launch and you're building Bitcoin. And so you have immediate use cases into enterprise and things that you can start thinking about from the very beginning.

And so you'll have a company that wants to use all the feature sets of storage in terms of privacy, security, cost savings. But they don't understand or want to deal with all this Bitcoin, blockchain, Crypto, mumbo, jumbo. So as storage labs as an entity can provide nice tool sets and abstract all that stuff out for them. And so they can use it just like they've been using Amazon S3 or all these other services. So let me just make it easy for them to use as a tool and they don't have to carry about the technical back.

So that's a bit of the sort of Red Hat Linux type relationship that people often mention as a business model in an open source space. Right, right. So it essentially is on the lines of that. Okay. Interesting. Well, thanks so much. Is there something else you want to talk about? I guess if people want to learn more about the storage, where can they reach you or get involved in the project?

Sure, sure. So the primary website that you want to go to is storage.io, shtorj.i-o, s-t-o-st-o-j-j-j-i-o. And so that's where you can style up for our mailing list to kind of get the status on the project, when things are going to be released, and kind of what we're doing in the space, and then you can look from there

in terms of the applications that we're building and the demos that we have out. So that's a great place to get information. If you like to get involved, we're looking for more developers to build applications on top of storage that do cool things and play with our existing APIs. So you can get in contact

with us at Hello at Storage, S-T-O-R-J.I-O.O. If you want to get involved that way, and we have also a form and some other mediums to get in contact with us in the community. Towards probably the end of this year, beginning of next year,

we'll probably do another crowd sale. So again, the main value proposition of the crowd sale is early access to the software for storage. So we'll be pushing out very, very early versions. of DriveShare and met it as fairly soon, but again, only the people

who participate in the crowd sale will get access to that. So we'll open up that opportunity again once we get feedback from her initial participants. Just very briefly, if you participate in the crowd sale, though, you also obtain, I presume, you know, storage coin, right? Which then you could potentially, although I guess you are not intended to,

since it's not the securities offering, but you could use that to speculate on the, you know, the future and the success of the platform, correct? Right. So, I mean, we're more using the cryptocurrency for buying, selling space in the network and using it for early access.

Right, right. It's a necessary point, but it's a cryptocurrency, people are going to do what they're going to do with it. Yes. We have no add to that. I bought it to speculate if some people do it

yeah if some people do it don't blame it on Sean don't blame it on me I didn't do it I was developing a software you know okay excellent well thanks so much for coming on

I think it was super interesting to go into that and just see this sort of really the first time we had a decentralized application on and not just talked about it sort of as a theoretical thing and as a we work on that broad area, but something really specific. And I'm actually, um, really excited. I think it sounds like a great project. Yeah. As am I. If I could, if I could just add, I got to say that to me, this is probably one of the most exciting areas of development in crypto and decentralized apps because it's, it seemed.

so obvious, right? I completely agree. And also, it's, it's something that everybody uses. I mean, to me, it's, it's what I'm most, most looking forward to in terms of what I could actually use crypto for. I agree. It's just, we have this tool set. We have this problem. They fit together quite well. And like you said, it's just kind of the obvious next step. So that's, that's what we're really pushing towards. Yeah. I think the, the,

the, the next, uh, I guess sector that needs to be, that needs to be, uh, disrupted like, like you're doing would be access to Wi-Fi.

Yeah. So, the mesh net is next. So we have to fall, uh, solve decentralized cloud storage, maybe decentralized compute. But,

uh, that meshnet is kind of that next third step. So one thing at a time. So when you're starting, when you're starting, when you're starting, the meshnet.io? It's probably already taken.

So we'll see where that goes. There's plenty of exciting things in the space. Always good stuff to look out for. Yeah, well, thanks so much for coming on again. Well, thanks a lot, man. Thanks for letting us talk about this topic. And I think Sebastian will be excited to try that. I'm going to be excited to try it out.

And I'm sure a lot of our listeners are going to be excited to try that. Yeah, maybe we can do another talk once we get a little further and start pushing some things out. And then we can really talk about the future. Absolutely. We'd love to come back to this, you know, at some point down the line. Yeah, and thanks so much for listeners for listening. We've had like 13 viewers on here the whole time, which is pretty cool because we've just started doing hangouts. So I think most people are like almost everyone still used, you know, they listen to it as

audio podcast but it's great to have actually some people like kind of live in it's exciting we had questions too we had people actually had a question no that's super exciting so hopefully we see more of that in the future also for those who are just listening on audio we are doing live hangouts now so you can sort of watch it live also ask questions interact you can of course also follow us on twitter at episode bTC will also let you know when the hangouts are happening so you'll know about that and you can of course support us with your tips which we do appreciate at episode of bitcoin.com slash tips and you can also subscribe to a weekly newsletter at epitherto bitcoin.com slash newsletter and leave us an iTunes review we love that and you can let us know

how we're doing what we can do better so and what we're doing well of course don't forget that so thanks so much and we look forward to being back next week all right awesome thanks for Avenue.