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Blockchain: the key to unlocking a new storage marketplace

(Image credit: Image Credit: Zapp2Photo / Shutterstock)

While cryptocurrency has been getting the headlines, there is another technology that deserves equal air time. Enter, Blockchain. Blockchain has emerged from the shadows of cryptography and showcased an exponential breadth of capabilities, some of which have been well publicised. This includes, giving logistics companies’ constant sight of the location of their supplies; enabling consumers to make cross-border payments without banks; and ensuring that proper royalties are paid for music without the need for a middle man, and of course as the platform on which cryptocurrencies run.

While this is certainly very relatable and without a doubt beginning to change the way consumers and businesses operate, blockchain has important and business differentiating advantages for every business: data storage capabilities. Today, businesses often think about storage as being on-premises or in the cloud, but blockchain makes it possible to create secure, decentralised storage. Something at Veeam we refer to as “a storage marketplace”.

Purchasing more data storage capacity is a task familiar to many IT staff. However, unbeknown to many C-suite executives, most on-premises storage have an amount of unused storage capacity, that can vary, fluctuating with business need and seasonal dependencies. Although virtualisation and storage enhancements have dramatically improved efficiencies of data centre servers, there is still spare capacity that goes to waste. But with blockchain this excess storage capacity could be monetised and used as an opportunity for organisations to sell – and buy –on a storage marketplace.

To best understand this concept, we often think of how the electrical grid works. To match supply and demand, power companies buy and sell electricity to each other constantly. This makes up for both shortfalls and making the most of any excess electricity produced. At first there were a few main power distribution centres working in this way, but now there is a huge range of suppliers on a local and national level. This means the end-user has no idea where their power is coming from, nor do they care, they just know that their lights are on and they want it as cheap as possible.

Eliminating the problem of bandwidth and latency

When we refer to a storage marketplace, it is with the aim and ability of operating under exactly the same principles. This community storage grid is underpinned by blockchain and accessed by both storage providers and consumers. This means organisations with excess capacity can act as storage providers for those with storage requirements. When these providers need to reclaim this excess capacity, a seamless transition through blockchain can be conducted to move a workload or data set to the most appropriate location. This would be based on rules such as regulation and policy, performance requirements, and service level agreements.

To put it another way, this distributed model for storage could help many businesses offset purchasing costs for storage in the same way AirBnB helps pay the mortgage for people who work overseas for large periods of time

Many organisations are already using hyperscalers like AWS or Microsoft Azure to fulfil the flexibility requirements of their storage, so this concept isn’t new by any stretch. Given the capabilities and cost of working with some managed cloud providers, you might be wondering why this model is even needed. However, there are several important limitations to the cloud, which includes bandwidth and latency or in effect speed of service. When bandwidth and latency aren’t important, hyperscale public cloud is useful, but it is important to remember cloud service providers are certainly not immune to factors like malicious actors or power outages, which can detrimental to businesses success.

However, under the distributed storage model, bandwidth and latency aren’t as much of an issue. Businesses will be able to operate much more efficiently, with clear control and an unprecedented return on their storage investments, while still owning the infrastructure.

But what are the three steps for storage marketplace success? Firstly, distribution - which is perhaps the simplest issue to address. This high-performance distribution model across a multi-node environment with peer-to-peer content distribution is possible to accomplish. In fact, organisations like Microsoft, where it lessens the stress on central distribution hubs, already use this method of delivery. By chunking files or objects into standard or adaptive file sizes as appropriate, distribution can be even further accelerated.

Exciting new storage paradigm 

The second requirement is essential for any business outsourcing their storage: security. This includes confidentiality, availability and integrity. Confidentiality can be achieved with techniques including encryption and data protection. Effective key management ensures that data components are protected from malicious activity.

Availability is equally important to ensure that data is accessible 24/7 and remains accessible when either nodes go offline, or storage providers reclaim their capacity. To achieve this, businesses must ensure every piece of data is stored in multiple and redundant locations. 

And also, integrity. This means preventing any interference with data at all stages – including distributed, stored and received. This can be enforced through leveraging checksums, strong user access controls, and hash tables shared across the community storage grid. 

And finally, the marketplace itself is the third and final requirement. For the distribution model to be successful, the marketplace must track every sale and purchase of capacity. In addition, each transaction has to be immutable – that means all payments can be managed effectively, and both the provider and consumer can have sight of the exchange and understand how it is mutually beneficial.

Blockchain is, without a doubt, fundamental to both the security and the operations of the distributed model and marketplace itself. Blockchain technology can guarantee full transparency and ensure that every action is recorded due to the segmentation of data and its distribution across the grid. The chain will effectively eliminate any blind spots by ensuring that nothing occurs outside of the known ledger and create immutability. Blockchain also supports improved availability by ensuring any storage reclaimed would trigger the copying of that data to somewhere else.

Finally, and crucially, blockchain will provide proof that a contract exists between the data, the owner of the data and the provider of the storage. By providing clear evidence of these transactions, blockchain can create greater confidence and convenience in the whole system and eliminate the need for businesses to track exchanges manually.

A marketplace for data storage seems like the natural next step following the commoditised advent of the cloud. However, to do this successfully there needs to be a significant change in mindset for businesses. While they understand that data is their most valuable asset, it will take time to shift the view away from the assumption that data needs to be stored centrally to be trusted.

All the technology needed to create the marketplace model already exists. Blockchain is presenting an exciting new storage paradigm; and we will be looking out for organisations who chose to embrace it.

Mark Adams, Regional VP, UK & Ireland, Veeam (opens in new tab)
Image Credit: Zapp2Photo / Shutterstock

Mark Adams is Regional Vice President for UK&I at Veeam. Based in Veeam's UK headquarters in Reading, Adams is responsible for sales strategy and execution throughout the region.