Introduction to Sia and Siacoin Part 6

Freedom on the Sia network.


On the Sia network, there is no enforcement mechanism that would make storage providers transfer files to their clients when clients ask them to do so, yet the system still works. This is something that many people would find unthinkable because for many it is impossible to imagine a society without police, law violations, prisons and enforcement, yet blockchain networks prove again and again that many ideas and concepts that were unimaginable in the past can work on blockchain networks all over the world.

With no enforcement and no legal consequeces present on the Sia network, it may seem that storage providers would have an incentive to hold files hostage and demand a high random. By default, people and organizations buy storage for files and documents that matter. Nobody would invest into storage for something they have no need for. They would simply delete such files. Therefore, storage providers know that the files they are storing matter to the users. From this, one could draw a conclusion that in a peer-to-peer world with no legal enforcement storage providers would be able to start raising their fees once they have the files, in essence blackmailing the customers, yet this is not what happens in reality.

First, clients on the Sia network can use erasure codes, meaning that if they need a part of a file, they can request only the part and because they do not need the entire file, the probability of them getting what they want goes higher even when the overall probability may be suffering.

Access to erasure codes also allows users on the Sia platform to ignore hosts that do not cooperate with user requests and choose hosts that satisfy the demands of users. Because users have such choice options, power and control switch from hosts having it to users being in charge and the fee to get files from a provider becomes an incentive for providers to comply with requests of users.

This is similar to differences in what is known in psychology as positive vs negative reinforcement. The classic book on the subject is “Don’t Shoot The Dog” by Karen Pryor. The book explains how any person and any company, including technology companies, can stop people from thinking about what they are doing wrong and have them thinking about what and how they can do right. Turns out, the number of ways to change behavior from negative to positive is very small and is applicable even in places that have to do with cutting edge technology, such as blockchain networks.

In the scenario where storage providers get a reward for getting a file to a client upon client’s request, the providers actually start competing with each other based on speed and quality of service. Clients may submit a request for upload at any time and they can even conduct random checks. During random checks, clients don’t even have to download the files. The technology can simply be rewarding the providers for staying online and making the files accessible to users. These incentives, however, are not a part of the Sia blockchain protocol and users are completely in control of the incentives.

In addition to this, the Sia network allows users to choose storage providers based on a number of criteria. These criteria include but are not limited to prices, volume, and penalties that providers are willing to endure if something goes wrong. For example, if a user on the network wants to store really important files, the user could only be looking at offers from hosts that are willing to pay very high penalties in case something goes wrong, which shows the user that the storage provider is serious about the commitment of secure, available and dependable hosting. The coin that users on the Sia network use to pay for contracts is also called Sia.

The supply of siacoin will be growing on a permanent basis and all the newly minted coins would be going to miners for creating the blocks of the Sia blockchain similarly to how miners on the Bitcoin network obtain coins as rewards for creating blocks of the Bitcoin blockchain.