What Is Siacoin? Features and Tokenomics

Siacoin (SC) is the utility token of the Sia network, a blockchain-based distributed and decentralized cloud storage platform that works by using unutilized storage capacities to create a data storage marketplace.

Features of Siacoin

Siacoin's goal is to protect the privacy of user data. The Sia ecosystem consists of renters, hosts, miners and a team of developers who are responsible for building on the Sia network and Skynet. The Sia network is fully automated, running with minimal human intervention.

Skynet

Designed as an overall decentralized file-sharing and content delivery platform, Skynet is built on top of Sia. It is capable of storing and serving content in a decentralized manner.

Skynet is an open source protocol that stores any kind of data and files. Data can be uploaded on the platform through the user's own Sia node or from a third-party Skynet web portal. Files generate a 46-byte link after their successful upload, known as the Skylink. That link acts as the address of the file and can be shared with anyone so they can fetch data from Skynet.

Once a user successfuly uploads a file on Skynet, he or she does not need to stay online for the file to be available to others. Instead, Sia network takes all the responsibility for the file from that point, including its pinning and providing high retreival speeds: this means that DApps using this service have access to a decentralized storage layer.

Centralized applications can also use Skynet, as the protocol can allow any user base to store and distribute data without restrictions.

How Does Siacoin Work?

The Sia ecosystem consists of a few critical elements that are explained below:

Node: Instance or installation of Sia;
Renter: Uploader of files or data on the network;
Host: Person who lends their very own personal storage space for others to use so they can upload files to the network;
Contracts: As the name suggests, contracts are a legal set of terms between a renter and a host that both parties agree upon. Contracts serve the basic purpose of specifying the amount of data being stored, along with its time frame and cost. All contract data is tracked and completed by the software and the blockchain;
Siacoins: Siacoin is the main token that powers the Sia platform;
Siafunds: Siacoin also has a secondary token that is used for revenue sharing on the network. Holders of Siafunds is also granted Siacoins as a reward on the completion of every single completed contract.

After successfully uploading a file on the Sia platform, the file gets divided into multiple parts and encrypted. This file then sent all over the world through different routes, as renters upload the files and hosts store them.

Then, Sia’s automation kicks in to handle everything. The network ensures the availability of files forever after their upload by the user, as each file is copied multiple times. Hosts are not able to gain access to those entire files, as what they receive is only pieces of a file with encryption layers.

Siacoins

Siacoin is the utility token of the Sia network, fueling its ecosystem: almost all services and features available on the network can be accessed using Siacoins.

When a user uploads their data onto the Sia network, the storage space required for that data is bought with Siacoins. Hosts get paid in Siacoin for storing other people’s data.