When you come across the word "Siacoin", if you're familiar with several crypto coins, you probably know straight away that it's another crypto coin. But what won't hit you on your first look at the word is its meaning or functionality. So, what is Siacoin? And what is Siacoin used for? In this article, you'll learn all you need to know about Siacoin and how to profit from it.
Siacoin is a blockchain-based cloud storage provider. It operates on a peer-to-peer network with the alluring edge of being decentralized. This allows users to transact with each other without a middleman's intervention. What does Siacoin offer that existing cloud storage providers like Amazon Web Services don't? Well, quite a number of things. Siacoin is cheaper, more secure, and you can make some passive income from it.
What are the differences between this transaction and a typical transaction?
So, what is Siacoin cryptocurrency storage hosting about? Using the Sia network, you become a storage host and rent out your storage to other users for a fee. There are several ways this is different from a typical storage service.
- First, as a host, you can work with users renting from you to set the ideal fee.
- You can market your storage space service and choose who you want to work with or not.
- Renters can choose to rent from multiple hosts to get improved security or space.
- Hosts and renters are required to enter a smart contract agreement such that failure to keep the renter's data secure will lead to the hosts losing all their shares of Siacoin.
- 3.9% of the profit from every contract is distributed to Siafund holders.
Having cloud storage on the blockchain where you can store anything sounds exciting, but how exactly does it work?
How Does Siacoin Work?
Siacoin is a network that consists of the blockchain provider, the hosts, and the renters. If Bitcoin is operated using the Bitcoin blockchain algorithm; what algorithm is Siacoin using, and what is the trading symbol for Siacoin?
Siacoin runs on the Siacoin blockchain, and its governance token is also called Siacoin with "SC" as its trading symbol. SC is a proof-of-work crypto coin that relies on crypto miners to secure its blockchain network.
The Siacoin blockchain network powers all the transactions between hosts and renters. Hosts are in complete control of their data and storage space, and renters are required to buy storage services using Siacoin (SC) tokens.
The network works through an interconnected matrix of computer nodes. Each transaction begins with the Siacoin system breaking the user's data into codes, which it then sends through the nodes. Because the system is encrypted, no random node can decrypt the data being distributed. The data can only be accessed through a private key, which proves ownership of the content.
The high degree of data distributed across several nodes correlates to increased security levels. Your data is less vulnerable to blockchain hacks. Each data piece is split into 30 parts and distributed across several nodes. However, these nodes are not the core part of the Siacoin system.
So, what is Siacoin crypto functionality based on, and what is Siacoin for inversion? Siacoin's functionality is based on what's called "File Contracts." These contracts have rules and codes that automate certain processes and allow successful transactions between hosts and renters. Using inversion trading strategies, you can make profits on Siacoin when its trading price falls.
How Many Siacoin (SC) Coins Are in Circulation?
Siacoin (SC) is a proof-of-work crypto coin with an unlimited supply. SC has an unlimited supply because crypto miners can continuously mine the tokens. Currently, there are over 47.8 billion SC tokens in circulation. If SC tokens can be mined indefinitely, what is the future of Siacoin?
The sustainability of Siacoin starts by asking the question "Siacoin what is it and what futuristic qualities does it have?" Siacoin is not only a present-day P2P cloud storage solution but a service that will continually be in demand. As thousands of people choose blockchain-based cloud storage over traditional storage options, there'll be more demand for SC tokens to facilitate transactions. Hence, there's no cap on the amount of Siacoin that can be mined.
How Is the Siacoin Network Protected?
Blockchains are protected using different types of consensus mechanisms. Bitcoin is protected using a proof-of-work (PoW) consensus, while Ethereum is protected using a proof-of-stake (PoS) consensus. The Sia network is secured similarly to Bitcoin; it uses a PoW consensus mechanism.
Each transaction is processed as a block, and the blocks are validated by a group of miners in the Siacoin mining pool. These miners validate each block and work to protect the blockchain from attacks, and in return, they're awarded Siacoin tokens. You can mine Siacoin by setting up a mining rig using a Sia ASIC miner. Also, if hosting bitcoin mining interests you, you can also make passive income from it.
You can learn how to mine Sia profitably by getting familiar with a few concepts. First, you should be convinced of the potential to earn profitably from Siacoin for the next few years. This is because it might take a while for you to recover the capital you invested in setting up a mining rig.
So you need to answer the question: What is the future of Siacoin? Once you're settled with the fact that Siacoin will grow bigger in the years to come, the next step is to join the best Siacoin pool and start earning from mining.