What is Storj?

Storj is a decentralised, Ethereum-based, end-to-end encrypted cloud-storage network. It combines the benefits of cloud-based storage and blockchain technology to solve problems relating to data failure and security in cloud-storage solutions. Offering an alternative to traditional cloud-storage solutions like those offered by Amazon or Google, Storj aims to transform the cloud storage landscape by offering a platform that does not experience downtime and cannot be censored or monitored.

Storage node operators on Storj are rewarded with STORJ tokens, the platform’s native ERC-20 utility token, for providing stability, long-term storage, and bandwidth to the network.

A brief history of Storj

Storj Labs, the company behind the Storj platform, was co-founded by Shawn Wilkinson and John Quinn in 2014. In late 2018, it launched Storj (pronounced as “storage”), an open-source, decentralised cloud-storage solution that makes use of blockchain technology to provide end-to-end encrypted cloud-storage services, enabling users to store their data across a distributed network.

The Storj network was founded on the Bitcoin protocol, with the first version of its native token Storjcoin X (SJCX). However, in October 2017, the network transferred to the Ethereum blockchain and discontinued SJCX. SJCX coin holders were permitted to convert their coins to the new token STORJ in a 1:1 ratio up until December of that year.

According to Crunchbase, Storj has raised a total of US$35.4 million in investment across seven rounds so far. Its first investment round was conducted in August 2014, raising a total of US$500,000 in a crowdsale. Its first venture round was conducted in 2015, and in 2016 it raised US$1.8 million in a seed round. In 2017, the Utah Governor's Office of Economic Development (GOED) awarded Storj a US$100,000 grant. That same year, it raised an additional US$3 million in a round led by Stream Ventures, BnkToTheFuture, and Gabriel Jarrosson. Its most recent investment came in the form of an Initial Coin Offering (ICO) round on 11 July 2017.

At launch, STORJ had a limited supply of 500 million STORJ tokens. After the initial minting of these 500 million STORJ tokens in 2017, Storj locked up 245 million tokens in reserves and released a total of 70 million tokens into circulation. Following the token sale later that year, 75 million STORJ were burned (removed from circulation), bringing the new total supply of tokens outstanding to just shy of 425 million. No new tokens will be minted once this total supply is exhausted.

How Storj works

In short, Storj encrypts, shards (the splitting of a blockchain into multiple pieces), and distributes data to nodes around the world for storage. As such, no single entity can have access to all the uploaded data, ensuring that network participants maintain full control and ownership of their data.

The network provides a blockchain-based, encrypted, distributed cloud-storage option that is both open source and purportedly sustainable. Key aspects of the platform include end-to-end encryption, peer-to-peer (P2P) technology, and high availability. It claims to eliminate outages, downtime, bit rot, ransomware, and data breaches at a fraction of the cost of traditional cloud-storage solutions, with faster download speeds.

Storj integrates a number of security mechanisms to guarantee that the blockchain is secure and resistant to hacking. It incorporates a zero-trust design, multi-region high availability, default encryption, and edge-based access controls as part of this strategy.

Its native cryptocurrency, STORJ, is an ERC-20 utility token that enables users to receive compensation for renting out excess storage space in exchange for Storj platform services.

What is Storj used for?

As the platform’s native token, STORJ is used as a method of payment on the network. Users can rent redundant disk space and pay for uploading data to the cloud using STORJ. Similarly, storage nodes may receive and sell STORJ as compensation for their extra space and bandwidth.

Anyone with hardware that meets the Storj requirements can operate a node. It also provides a way for people to get paid for their extra storage space in the network's STORJ utility token.