What is Siacoin (SC)?

TLDR Siacoin (SC) is the utility token powering Sia, a decentralized cloud storage network that lets users rent unused hard drive space globally through blockchain-secured smart contracts.

1. Decentralized storage marketplace – Competes with centralized providers by offering cheaper, private storage via a global network
2. Blockchain-powered security – Files split into 30 encrypted fragments stored across hosts, with agreements enforced by smart contracts
3. SC as operational fuel – Used to pay storage fees and lock collateral, incentivizing reliable service from hosts

Deep Dive

1. Decentralized Storage Alternative

Sia creates a peer-to-peer marketplace where anyone can monetize unused storage space or rent storage at rates up to 90% cheaper than Amazon S3 (Sia whitepaper). Unlike centralized cloud services, no single entity controls data – files remain encrypted until users access them.

2. Architecture & Data Security

Uploaded files are divided into 30 encrypted segments using the Threefish algorithm. Each segment gets distributed to unique hosts worldwide, requiring only 10/30 fragments to reconstruct files – ensuring accessibility even if 20 hosts go offline. Smart contracts automatically penalize hosts for downtime using locked SC collateral.

The June 2025 v2 hardfork introduced Utreexo (compressed blockchain syncing) and RHP4 (faster file transfers), reducing node setup time from days to minutes (Sia Foundation).

3. Token Utility Mechanics

• Renters: Pay hosts in SC for storage (avg. $2/TB/month vs. $23/TB on AWS)
• Hosts: Lock SC as collateral to guarantee uptime – forfeited if service fails
• Network growth: Over 3.5 PB of storage available as of August 2025, with 560K active hosts (SiaStats)

Conclusion

Siacoin transforms unused hard drive space into a blockchain-coordinated storage layer, prioritizing affordability, user-controlled encryption, and censorship resistance. While technical upgrades like Utreexo simplify participation, Sia’s long-term success hinges on whether decentralized storage can meaningfully disrupt hyperscalers’ economies of scale. Can mainstream users embrace the tradeoff between corporate convenience and cryptographic self-custody?