What is Decentralized Cloud Computing?

What is Decentralized Cloud Computing?

Estimated read time: 6 minutes

Interested in knowing about decentralized cloud computing? Look no further, as, in this article, we will discuss the same in detail.

Decentralized Cloud Computing

Centralized cloud computing service providers charge fees for their services. While these fees might not mean much to larger companies, smaller companies can feel the pinch. Amazon, one of the major cloud service providers, charges $23 a month for the AWS cloud data center storage they provide through.

While they claim not to handle the user’s data in an unethical manner, they still have the ability to use data analytics to analyze your data in order to improve their services and product offers.

In some cases, cloud storage providers can also use data stored in their servers to direct tailored ads to the data owner, something which many companies find intrusive.

Worst of all, cloud platforms currently operate a server model that has a single point of failure making data breaches far more likely.

Decentralized cloud computing, leveraging blockchain technology, is a service that has already begun to cement itself into the day-to-day process of businesses and companies.

Decentralized cloud computing offers a peer-to-peer network for cloud marketplace that users can join either to use cloud services or to provide their excess resources such as for computing, networking, storage, etc. to others. The decentralized cloud computing infrastructure manages the host and deployment of cloud services.

For example, Ethernity cloud by Ethereum, according to the developers, is now capable to run decentralized applications and smart contracts. Instead of a central authority, which are cloud service providers, in this case, ethernity cloud will leverage smart contracts.


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When it comes to decentralized cloud computing, decentralized cloud data storage is leading the way. Service providers like Storj and Siacoin have already built a credible presence in the market by offering a level of security that the server-client cloud providers can’t match.

Undoubtedly, more service providers will enter the market as it grows. Startups such as Filecoin and MaidSafe are already using innovative techniques to try to claw out their own share of the cloud data storage market.

Let’s take a look at the features and working of a decentralized cloud network.

What should a decentralized cloud computing solution accomplish?

What should be a decentralized network of cloud services?

It should meet the following criteria:

  • A decentralized network will ensure that no one entity controls the entire platform.
  • If one service provider controls the entire network and provides sub-optimal service, the customers will receive a below-par service.
  • A competitive marketplace for cloud services such as data storage should see multiple providers competing to store user data, thus ensuring quality.
  • Customers should be able to delete the data from their computer systems and be assured that once they get their data back from the service provider, it’s complete and identical.
  • Only the customers should have access to their cloud resources including data and no one else. The service provider mustn’t be able to view the content.
  • The service should have inbuilt redundancy, so that customer is assured that their data is safe, and hasn’t been destroyed.
  • The service should have a good performance level so that the customers are assured of being able to access their cloud resources as and when they need them.
  • The service should be cost-effective for customers. For example, the $23 per month fee charged by Amazon for cloud storage isn‘t optimal in today‘s era when storage technology has become very cheap.
  • The entire system should have incentives for the cloud service providers to participate and for the customers to use it.

The central idea of a decentralized cloud computing storage is that people with excess resources, e.g. hard drive storage or computing capacity, will rent their resources for a fee. Users looking to avail such resources on the global network will naturally be the ones to pay a fee for this service.

While providers may not necessarily be able to promise rock bottom prices, this type of decentralized cloud system will ensure better data security and safety, specifically, since there is no one point of failure in regards to the network structure.

A transparent mechanism will ensure that the users pay the fees and reward the best service providers through continued use of their services. Sub-optimal service providers, on the other hand, will be held accountable for their poor quality of service and quickly put out of business.

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Now, let’s take an example of a cloud storage service and look at how it will work in a decentralized setup.

How does a blockchain-based distributed storage service work?

A blockchain-based decentralized cloud storage platform works in the following manner:

  • The basic premise is to share a file across a peer-to-peer network (P2P) and track the encryption, storage, retrieval, and contract administration using a blockchain.
  • The customers encrypt their files and control the encryption key. The customer is called the ’renter‘.
  • The file is then divided into many pieces, and duplicates of each piece are created to ensure redundancy.
  • The shards, i.e. smaller pieces of the file are then stored in multiple computers in the P2P network. The owners of the individual computers on the network are called the ’farmers‘.
  • Each farmer gets only the shards that are already encrypted, and hence they can‘t access the content of the shard. Even if hackers attack different nodes they will only get the encrypted shards, which they can‘t read, meaning they can‘t possibly reconstruct the entire file from it.
  • When the renters request their file back, they will need to use a blockchain-based hash table along with the encryption key, so that the entire file gets reconstructed from the individual shards. The file will be rebuilt after the farmers send back the individual shards they hold.
  • The renter then uses the encryption key to decrypt the file.
  • The smart contracts in the blockchain govern the terms and conditions. The renters pay for the file they had stored while the farmers get paid for their storage volume in a cryptocurrency such as Bitcoin.
  • There is an audit process to ensure that the farmers are holding the shard they had agreed to hold.
  • When farmers successfully deliver on their obligation they will accumulate a good reputation as well as cryptocurrencies.
  • If farmers default on the terms and conditions then they aren‘t paid. Repeated instances of default may result in disqualification.

Note: There is one differentiation in the current centralized servers for cloud storage that decentralized blockchain-powered cloud storage makes redundant. In the current centralized landscape of ’public cloud‘ and ’private cloud’, both use the technology framework of cloud computing. 

However, the public cloud is a multi-tenant environment where the cloud storage service provider stores massive amounts of data from many individuals and businesses, whereas the private cloud is designed for a single organization. 

In a decentralized cloud solution like Storj, this differentiation isn‘t relevant. This is because the service provider or any storage node on the network is unable to access any of the content on the network.

Everything is encrypted, and as only shards of data are stored by farmers and not the entire file, there is no way they can access the data. 

The blockchain start-up Storj Labs has already built a blockchain-powered decentralized cloud storage network and so has assumed a leadership position in this exciting new market.

They have also built a platform comprising of open-source tools, and developers can use it to build their own decentralized cloud storage network.

While their number of active daily users remains small, this is one of the most promising decentralized cloud storage networks around.

Looking Forward to Investing in Blockchain-based Cloud Computing?

The Cloud computing industry is witnessing a major transformation in the form of a decentralized marketplace for cloud computing services. The user base is continuously increasing with the rise in the popularity of blockchain technology solutions.

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The decentralized confidential computing service providers such as the Akash network promise their users data privacy, anonymity, and availability while addressing their security concerns.

If you are planning to get your feet wet in decentralized cloud computing either by using a cloud service or by renting your idle computing resources for end-users, it is better to first do your own research by extensively studying the current decentralized cloud providers and their models.

If you are new to this domain, we would suggest that you build a team of competent cloud and blockchain technologies professionals that can lend you sound investment advice and offer niche development skills.

DevTeam.Space can offer you a field-expert software developers community, experienced in all the latest technologies including, cloud computing and blockchain.

To partner with these developers, all you have to do is fill out this quick form with your initial blockchain cloud computing requirements and one of our technical managers will get back to you to discuss more details.

Frequently Asked Questions

1. What is decentralized cloud computing?

It is the availability of cloud computing resources over decentralized computer nodes forming a peer-to-peer network, where no one entity has central control in the network.

2. What are some decentralized cloud platforms?

Dfinity, Solana, and Akash network are some popular examples.

3. What are the benefits of decentralized computing?

Some of the benefits of decentralized infrastructure include increased data protection, control over your cloud resources, transparency, security, etc.


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