Article Written by Danny Allan, VP, Product Strategy at Veeam Software

Most technology professionals recognize that the future of blockchain goes far beyond cryptocurrency. The technology has many more potential, valuable applications in financial services, the supply chain, and many other industries.

Add one more to the list: data storage. Typically, IT thinks about storage as on-premises, in the cloud or in a colocation facility. But blockchain has the potential to enable secure, distributed storage. 

Fundamental Components for Distributed Storage

Though virtualization and storage enhancements have dramatically improved efficiency, most data centers still have some amount of unused capacity. This unused capacity can be leveraged by the organizations to improve the return on capital investment, while driving benefits for the local community.

Imagine a world where a local marketplace of storage was enabled as a community storage grid with both storage providers and storage consumers.  Those organizations with excess capacity could serve as a local storage provider for nearby organizations with a local storage requirement who would become their customers. As organizations needed to reclaim their excess capacity, blockchain would enable a seamless transition for customers' data to be migrated to the most appropriate location based on performance, policy and SLA.

This type of distributed storage model would require three essential components: distribution, security, and a transaction marketplace. The first of these components is probably the simplest to address. 

High performance distribution across a multi-node environment can be accomplished with peer-to-peer (P2P) content distribution. Many organizations such as Microsoft already use this type of content delivery to lessen the stress on central distribution hubs. Distribution can further be accelerated by chunking the files or objects into standard or adaptive file sizes as appropriate.

The second requirement is security, which encompasses three essential attributes: confidentiality, availability and integrity. Confidentiality can be achieved with known techniques for encryption and data protection. With appropriate levels of encryption and effective key management, it ensures the data components are protected from prying eyes. Availability is accomplished by ensuring that each piece of data is securely stored in multiple and redundant locations. SLAs may dictate the level of redundancy, but a minimum threshold would be set as default to ensure that data was not lost with nodes going offline or storage providers reclaiming their capacity. Lastly, integrity can be enforced by having strong user access controls and leveraging checksums and hash tables that are shared across the community storage grid. This prevents tampering of the data as it is securely distributed, stored and retrieved across the grid.

The third requirement is a marketplace which tracks all buying and selling of capacity. Each transaction must be immutable so that payments can be effectively managed and both the provider and the consumer benefit.

Immediate Value of Blockchain

Blockchain adds value in two areas: security and with the marketplace. As data is segmented and distributed across the grid, blockchain and distributed ledger technology can ensure that each data action and movement is recorded. This chain helps improve upon the security (integrity and availability) of the storage grid and ensures that nothing occurs outside of the known ledger. There is immutability to this model, eliminating blind spots. It also improves upon the availability model, in that reclaimed storage capacity by a Data Provider would trigger the copy of data to an alternative Data Provider, providing confidence that the data is redundantly stored. Blockchain adds value within the marketplace by providing proof that a contract exists between the owner of the data and the provider of the storage, and that the data indeed exists.

In the majority of business cases, every transaction of funds or data must be verified, which blockchain does automatically. By providing unalterable records of transactions, using blockchain for data storage is immediately beneficial in any vertical that requires proof of transactions but may not otherwise have an easy way of doing so. The world of cryptocurrency is a good example: every transaction has to be verified because otherwise there is no way to track the data, so by employing blockchain, organizations no longer have to worry about manually tracking these transactions. 

Why Distributed Storage Grids?

It is evident that blockchain has a role to play with secure, distributed storage grids. However, with the scale and size of public cloud, why might we want the distributed model?  The answer is simple: bandwidth and latency. Hyper-scale public clouds are useful when bandwidth and latency are not a factor. However, we all know that the speed of light is constant and not all organizations are in a location that can full take advantage of cloud. Additionally, bandwidth and network capacity continue to be a limiting factor. The distributed storage model can ensure that organizations never run out of capacity, while taking advantage of the surrounding regional area.

With a distributed storage grid, IT no longer needs to purchase more storage than they actually need at a given point in time. They also will not encounter the bandwidth and latency problems which frequently occur when using cloud storage; those that do have more storage than they need can monetize it by securely selling their excess to nearby organizations. Businesses will be able to function much more efficiently with a stronger return on investment.

The eventual outcome

One major concern surrounding distributed data storage is security. While the technological capabilities are mostly in place today, security and privacy concerns make it unlikely these models will go mainstream in the short term. Still, several startups are currently working on these challenges to create distributed storage mechanisms where capacity can be bought and sold like a tangible product. Time and added value will effectively address the cultural challenges that cause today's hesitation in moving toward this model.

A good example of a similar situation is the electrical grid. Initially, there were only a few main power distribution centers, but today there is a huge selection of both local and national providers. Just as in the electricity distribution model, distributed data storage will depend almost entirely on capacity and pricing. Power companies buy and sell power to one another constantly to make up for shortfalls and to monetize their excess. All the while, the person using the energy typically has no idea from what specific source their power originates.

In the future, the computing and storage world will behave almost identically to the power grid. People will store and retrieve data or execute programs as needed, while companies with a surplus of storage sell their excess capacity.

While blockchain data storage may seem like something that will happen far into the future, the reality is all this technology exists today. It is possible to accomplish everything that was just discussed right now; however, widespread adoption depends on the market's willingness to accept new computing and storage paradigms. As with any major paradigm shift, there needs to be a cultural shift as well.

I'm convinced that this cultural shift will occur, because the market pressures and stakeholder demands of today and in the future will require IT to find more nimble ways to provide storage. Plus, it's a natural progression within the trend toward commodification of storage, which the cloud set in motion more than a decade ago. As a result, distributed storage built on blockchain will result in faster networks and reduced latency for all users who choose to take part in these networks.

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About the Author

Danny Allan, VP, Product Strategy at Veeam Software

As Vice President for Product Strategy, Danny is responsible for envisioning, designing and delivering product strategies and solutions. He partners with enterprise customers and large Service Providers to assess and ensure long-term industry success. With 20 years of technology experience, he is passionate about solving customer problems and software innovation.