What is Siacoin

Introduction

What is Siacoin and why I even spending my own time to write article about this project? All this things you can read in this article.

First, I write about project itself, go to some details, ecosystem, price analysis and future. Secondly, closing this all with conclusion.

Please read, comment and share!

Let’s do the job.

What is Siacoin?

Once again, what is Siacoin? Siacoin is the native cryptocurrency of the Sia network, a decentralized cloud storage marketplace. Project was launched in 2015. Sia aims to democratize cloud storage by utilizing users’ unused hard drive space and connecting them with individuals and organizations in need of reliable and secure data storage services.

So, right now you not something about Siacoin, but let’s get to some details.

Details about Siacoin

How does Sia work?

At first, at its core, Sia operates on a peer-to-peer network. This allowing storage providers to rent out their available hard drive space to users seeking data storage. Sia differentiates itself from traditional cloud storage providers by prioritizing decentralization and trustlessness.

When a user uploads a file to Sia, it is automatically divided into 30 encrypted segments. Moreover, each segment being stored on different storage providers’ hard drives. In total, this redundancy ensures data security and availability, as no single provider has access to the complete file.

Finally, to incentivize storage providers, Sia utilizes smart contracts that define the terms of the storage agreement, including duration and price. Providers must periodically prove that they are storing the data as agreed upon, and they receive compensation in Siacoin for their services.

Layer-2 Protocol

The project has also developed a Layer-2 solution called Skynet. Skynet is built on top of the Sia blockchain and serves as a platform for decentralized content delivery and file sharing.

Skynet operates as an alternative version of the internet. Thus, data controlling users rather than centralized web servers. This distributed model enhances data security, resiliency, and censorship resistance.

Users can upload various types of data to Skynet, generating unique identifiers known as Skylinks. These Skylinks can be shared with anyone, allowing them to access the uploaded data, whether it’s an image file or an entire website. Skynet provides an innovative hosting service for both decentralized applications (dApps) and centralized applications seeking secure and cost-effective data storage.

Proof of Storage

In one of another articles I have written about different consensus mechanisms. Sia use Proof of Storage. Let me explain what is all about. This mechanism ensures that storage providers fulfill their obligations and maintain the agreed-upon level of data availability.

When entering into a storage contract on Sia, providers must continuously prove that they are storing the data as agreed upon. These proofs are periodically submitted to the blockchain and are publicly verifiable. If a provider fails to provide the required proofs, they may face penalties or lose their compensation.

The use of Proof of Storage guarantees that users can trust the storage providers on the Sia network. It adds an extra layer of security and accountability, ensuring that data remains accessible and protected.

What about supply? There is something special about Sia supply?

Supply of Sia

Every year number of Siacoins is lower, but still unlimited. In the moment of writing article it was almost 60 billions of circulating units with price $0,0033 per unit. As Siacoin has ambition to become industry-standard storage layer of the internet, then unlimited amount of coins is needed.

New Coins Created

New coins are created during Proof-of-Work(PoW) consensus mechanism. Almost 60 billion is circulating and still coins are created. The pace of creating new coins is related to amount of miners.

Siacoin Inflation

Let’s take a look below on inflation of coin.

Source: https://docs.sia.tech/get-started-with-sia/siacoin-total-supply

Every year inflation of coin become lower. After 20 years of existing this project will be on inflation lever 2,3%. Right now it’s about 5,4% as project is more than 9 years on the market. By the way, 9 years in crypto sector is a lot. I pretty sure there are not so many projects what have so long price history like Siacoin has. About price in depth little bit later, but it will be really exiting to dig into it.

Siacoin Ecosystem

In case of ecosystem Siacoin partnership with a lot bigger and smaller platforms. The best and the most actual information about new partnerships you can find on official website.

I will just mention about a few cooperation’s.

Crypto Exchanges

Main cryptocurrency exchanges partner with Siacoin are Kraken, Crypto.com and Upbit.

Crypto Mining Pool

One of the largest mining pools for Siacoin – SiaMining and more universal f2pool. Everyone welcome to visit.

Crypto Wallets

When you looking for crypto wallet then you can use Lite Wallet. For more details explore project website.

Portfolio Tracker

For sure one of the portfolio trackers for every cryptocurrency enthusiast.

Another use cases

There is a lot of another uses cases of this project. I just mention a few like monitoring systems, benchmarking tools, synchronizing tools and so on. Take a look here again.

Siacoin Price in Depth

Source: tradingview.com

In last bull market obviously price of project skyrocketed. It shouldn’t be surprise, because in last bull market almost all altcoins prices went very high, but it in case of Siacoin price every bull market become lower and lower. Is it a good sign? Of course, not.

Source: https://coinmarketcap.com/

As you can see on the graph above at a first bull market price reach ATH (All Time High) and during development of project and more capital every bull market pile of invested money in the project not increase. I just remind you ATH is $0.09287. Next peak of price in bull market when potentially more capital should wen to project it was $0,055 for unit.

In my opinion it’s not a good sign at all. Peak price is lower every bull market. Market capitalization after more than 9 years is 184,87 million of dollars. As a consequence market capitalization become smaller. Don’t you think it is strange when even more capital is located into cryptocurrency market every bull market? Exactly.

Siacoin and Top Competitors

In this section I will compare top cryptocurrency storage projects, because Siacoin is one of them and it’s pretty interesting to see how.

Source: rangergalaxy.com

All those projects are at the same time similar, but also different. Specifics of the projects play a role. Then support of community brings a lot to the table, and of course, I can’t forget about marketing efforts. Project flames need to burn always.

Let’s take a look above and in L1 – project of first layer – both, Filecoin and Arweave have better market capitalization. What about marketing efforts? Pretty interesting things happen here.

X supporters for projects are Filecoin – 671,4 k followers, Arweave – 106,4 k followers and Siacoin – 17,9 k followers. In this case marketing efforts pay off. They always do.

Future of Siacoin

Project still has huge ambition and would like to be standard for crypto storage in Internet. Unlimited supply makes unlimited possibilities, but competition don’t sleep as well. As one of the first project of crypto storage project should be one of the leader and be dominant in this aspect, but I don’t see it. 7th place in the sector is not so bad, but little disappointing.

Market capitalization every bull market seems to be lower, what mean capital outflow from project. Not good at all. Ecosystem, mining process, and another business evolutions little bit better than average, but not stunning.

In general, I think project should be developed and in time ecosystem will growing, but from investment perspective it’s rather average project to invest. My main decision about it is because of price behaviours what seems to showing project weaknesses.

Conclusion

Siacoin for sure is developing project with establish position in crypto storage sector. Ambition, team and ecosystem I am rating as little bit better than average. Competition don’t sleep and overperformance project.

It looks that capital outflow to another projects in the sector. Every bull market there are less and less money allocated into project. Very bad sign.

Without any doubt, project is interesting and conception stand out, but again. Competition and their marketing efforts seems to pay off. Especially, Filecoin – leader and Arweave – pretender are strong competitors. I don’t see how Siacoin could outperformance those 2 projects in this moment.

From investment perspective I don’t see it. Of course during bull market return of investment could be enough, but there are project what can give you better ROI and are as seems interesting like Siacoin is.