Decentralized Cloud Storage: The Risks & Rewards

A vast number of companies, these days, use cloud storage to keep a repository of the data they generate. This practice streamlines business processes, remote collaboration, and access to vital documentation. However, current centralized storage systems have shortcomings in the way of privacy, security, and cost effectiveness. Decentralized storage systems promise to deliver offerings that make up for the failings of their decentralized counterparts.

The ’90’s tech boom brought with it, a good amount of the infrastructure that supports the internet today. This technological revolution meant that storage of the vast amount of data – collected at a rapid pace – drove up prices of power, cooling, and other operational expenses related to data storage. This lead to tech firms looking to grid computing, and virtualization to save the day.

As the sector grew, and eventually became the very backbone of modern industry, services became more distributed. This meant that service providers had to adapt their business models to allow for integrated management, with a focus on remote access, and cloud storage developed, out of this necessity.

Cloud storage service providers like Google, Microsoft, and Dropbox, et al, offer online information storage that can be easily accessed from any device, is elastic and dynamically scalable. All of a user’s information is remotely stored on servers, giving them on-demand access to more data than they would be able to carry around. This simplifies a lot of business operations and maximizes convenience but the architecture underpinning these cloud systems presents a number of drawbacks.

The first item to consider, is that a firm that employs the services of an online data storage provider not only outsources the storage of said data to a third party, but also entrusts it to a centralized system for safekeeping. Centralized data clusters are usually open to the potential of attack and exfiltration.

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The problem with entrusting a mountain of, typically sensitive, information to a system with a central point of failure means that information – technically not being in the firm’s possession – is at risk of being exfiltrated by a third party. Aside from hackers, various third parties could potentially access a firm’s information without the firm’s explicit authorization, for myriad purposes. All they’ll have to do is approach the company’s service provider, who is bound by regulations.

Third Party Exfiltration

The cloud service provider one uses is legally required to ensure that no illegal activity takes place on their platform. Cloud storage companies will, as a result, conduct routine, or random inspections of the content held on user accounts.
Even if the client has not broken any laws, some service providers could inconvenience organizations by denying them service and closing down their account, on moral, or political grounds.

Law Enforcement Exfiltration

If laws in the territory a cloud storage firm is based allow for it, law enforcement could serve the provider with papers compelling it to hand over a client’s sensitive information without the client being informed. Cloud Storage providers are often legally required to cooporate when law enforcement comes knocking.

Foreign Government Exfiltration

All the top cloud storage firms – by virtue of being based in the US – must adhere to a law which compels them to cooperate when law officials hand them a warrant to search their servers, even when a server is located on foreign soil. Exposing their global client base to the eyes of foreign governments.

The European Commission is preparing the E-Evidence Directive. Legislation that will allow European Union members states the same power to scrutinize cloud firms’ servers at will.


Although centralized cloud storage is a leg up from the file cabinet system, it has some technical shortcomings. As a result, it could still stand to be a tad cheaper to pull off, on the back end.

Centralized cloud infrastructure is set up in such a way that the consistent syncing between servers and multiple devices connected to a single account results in extra bandwidth costs. Switching between different providers for different features could additionally hurt the client’s pocket as the cost of negotiating configuration complexities grows.

Single Point Of Failure

The fact that centralized cloud systems have a single point of failure is a disadvantage in terms of securing user data, not just against third parties exfiltrating the information, but from technical mishaps as well.

Recently, a configuration error on Google cloud servers rendered the system inoperative for 4.5 hours. In that period, global services like Vimeo, Pokemon GO, Snapchat, Discord, and Shopify experienced a disruption in operations. A configuration error also played havoc with Dow Jones’ cloud systems, leading to a leak of a database containing the names of high-profile government members.

Decentralized Cloud Storage

Decentralized Cloud Storage is a relatively new variation. of cloud storage infrastructure. Decentralized cloud infrastructure operates by breaking data up and distributing encrypted bits of the information across all devices connected to the system. The servers it employs, unlike a centralized cloud system, only work as a switchboard, allowing access to stored data.

A decentralized cloud system is also referred to as an Edge Computing system, as all data is stored on the edge of the network (on user devices), as opposed to centrally, on a server. Edge storage is projected by research outfit, IDC to hold 45% of all data stored and processed by IoT (Internet of Things) enabled devices.

Decentralized Cloud Benefits

  • All data stored on the system can be accessed remotely, shared and collaboratively modified from multiple locations, without creating multiple copies of the same file for each update.
  • Reduces threat surface endemic with centralized cloud systems by eliminating the need for servers in multiple locations.
  • Risk management and legal compliance fall under the organization’s control and is not signed off to a third party who has their own interests to protect.
  • Utilizes organization’s own storage infrastructure and adds a security layer, keeping files tucked safely behind a firm’s firewall. Reducing the costs associated with file storage.

The decentralized cloud or edge computing architecture differentiates it from the centralized model used by file sync and share platforms. It improves the organization’s security posture, allows access to all storage, ensures privacy, keeps the management of organizational files under organizational control, and leverages the organization’s existing storage infrastructure,” – Thomas Ward, Vice President of decentralized cloud entity, Qnext.

Decentralized storage promises to do away with the risks associated with centralized counterparts, and put control of data back in the hands of the user. The only drawback, currently, is that blockchain is a fledgeling technology, and it could be some time before edge computing can scale to store large sets of data.

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Ash Bonga

I'm a marginally adequate digital assets trader and writer specializing in blockchain and the crypto sphere. Occasional contributer for
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