Blockchain hosting vs. traditional data center hosting

The rapid rise of cryptocurrencies has created a lot of buzz about the blockchain. Soon, what started with Bitcoin could potentially revolutionize data hosting models as we know it.

Data storage now forms the foundation of digitally transformed companies. As a result, global spending on cloud services is expected to exceed $51 billion by the end of this year.

Enterprise data storage and cloud adoption are driven by its intrinsic ability to quickly scale resources (up or down), the adoption of big data and analytics, and to provide new opportunities for collaboration.

What is data storage?

Data storage can be described as a general term for electronically archiving data on a computer or device. There are different types of data storage in a computing environment. 

The most popular of these is hard data storage, where the data is stored on a physical computer or server on-premise. 

Another popular approach to enterprise data storage is remote data storage. This data storage model is at the heart of cloud computing, where data is stored externally with a trusted third-party or a data center.

Going forward, experts predict that this approach will change to incorporate distributed storage by combining both the blockchain and cloud computing technologies. 

The primary idea here is to store data in multiple locations. This form of enterprise storage  promises to make data security more robust and transactions more transparent.

What is the blockchain?

The blockchain can be described as a highly transparent, shared, distributed ledger that helps decentralize the processing and storage of transactions. All stakeholders (or the consortium) on the network will interact with the network via a node (or peer network) in a transparent distributed ledger. 

These nodes will hold a view or a subset of the shared ledger. Every transaction will have an identifying cryptographic signature, which will allow the secure transfer of data on a peer-to-peer network.

What is blockchain storage?

When you apply these principles to data storage, you’ll be well-placed to create new opportunities to efficiently manage, store, and secure your valuable digital assets. Point-to-point encryption, for example, will help secure the data while in transit or at rest (where the it lives).

When you add the point-to-point distribution of identical copies of the blockchain across the cloud network, it’ll also add a third layer of security. This approach promises to be far superior to single-point data storage that comes with a higher risk of a data breach.

With distributed storage, enterprise data can be broken into tiny fragments, encrypted, and then stored across multiple nodes (across countries).

What are the key challenges?

While this storage model looks excellent on paper, applying it to real-world enterprise storage requirements can be difficult. This is because a distributed ledger such as the blockchain isn’t capable of storing large datasets. It can only store the hash key within each block on the distributed ledger. 

So at present, the few companies that offer blockchain hosting solutions store large data sets off-chain (following a traditional data storage model). They do this by assigning a shared value of the application as evidence or a digital signature on the blockchain. 

This “evidence” is stored as cryptographic hashes that correlate to the corresponding data residing off-chain in a data center.

When highly sensitive data is stored in this manner, it can increase your exposure to risk and not provide any new benefit to using this distributed storage model.

What is the alternative?

While the blockchain is perfect for hosting smart contracts and cryptocurrencies, it’s not ideal for hosting large files, virtual machines, large databases, and more.

However, the story doesn’t have to end here. At Artmotion, for example, we take a similar approach to secure business data. Our approach to military-grade encryption slices the data and distributes it across different locations in the data center. 

As a result, in the event of a data breach, not only will any potentially stolen data be meaningless without a decryption key, hackers will also have to collect all the different slices and put them together in a meaningful way.

So while blockchain storage solutions have a lot of promise, it’s still not a revolutionary idea that can transform data storage.

To learn more about our approach enterprise data storage and encryption, schedule a free no-commitment consultation with one of our in-house experts.

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