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Why Data Storage is Shifting to the Blockchain

June 8, 2022

In the past, the most embraced form of data storage was traditional in-house data centers. However, cloud storage has started to replace that narrative.

Cloud storage was introduced with the promise of greater efficiency and improved data storage capacity, which attracted many businesses. Today, cloud storage is facing competition from blockchain technology. Blockchain promises to solve data security challenges - an issue that is a great threat to cloud storage.

With blockchain data storage, companies and individuals could enjoy enhanced data transparency. Companies are interested in this new technology hoping that it could revolutionize data storage for the better.

This article discusses blockchain as a more secure and flexible alternative to data storage. It also prepares the reader for the future of blockchain as a data storage solution.

Blockchain storage versus cloud storage

There are numerous differences between cloud storage and blockchain. For instance, data storage, data security, and data structures differ between these two technologies.

Data storage

The cloud is a virtual space where you can access data remotely. Blockchain storage is a little different because it is an encrypted system that uses different methodologies to encrypt and store data in protected databases.

Blockchain is built so that the system keeps the data across several nodes that form a consensus on the exact position of the data.

This storage method is different from the cloud, where data remains in one location and is easily accessible to an individual as a whole.

The way blockchain stores its data in small chunks and distributes them on a network adds a security layer. If an individual or entity breaks into the system, they can only access a fraction of the data rather than entire files.

Data structures

In cloud storage, data is mutable, while in blockchain, data is immutable. The cloud storage system is set up to let you change the already stored data. These modifications affect how another user perceives the data.

Users cannot adjust the already existing data in the blockchain. You cannot delete or modify existing entries. This helps to prevent data tampering.

Data security

Cloud storage relies on third parties for data security. It provides services using the Software as a Service, Platform as a Service, and Infrastructure as a Service models. Blockchain, on the other hand, guarantees data protection and integrity without involving third parties.

Besides, data stored in the cloud can exist as either public or private. However, in blockchain, data is always public.

Blockchain embraces transparency, meaning that an entity cannot hide data from other users. It enables individuals on the blockchain to track how data moves from one point/user to another.

Costs implications of storing data on the blockchain

Unsurprising, such a storage technology that threatens to ‘overthrow’ cloud storage and offer a highly secure system has many cost implications.

In the last few years, the costs for implementing and running a blockchain system have risen tremendously.

This is due to increased data transmission and storage costs. Besides, the high demand for blockchain services has driven up cryptocurrency prices.

There are specific factors that keep the blockchain functioning normally. These components also contribute to increased blockchain usage costs.

In the case of Bitcoin, nodes and miners contribute significantly to rising costs. Miners assemble valid Bitcoin transactions in blocks, which enhances data security.

However, the mining process consumes a lot of electricity. Currently, the cost of Gas is 0.00000005 ETH, and by storing a 256-bit word, you could use up as much as 20,000 units of gas.

A kilobyte would take 640,000 units of gas, which translates to a cost of 0.032 ETH. Based on the current value of this cryptocurrency (2,672.32 USD), that is equivalent to 85.51 USD.

Now consider storing as much as 1 gigabyte of data. The cost would go as high as $32,000. That amount is unsustainable for most entities.

Unless blockchain finds cheaper options, the costs for storing data on the system could push out some entities and make blockchain storage solutions limited to only a few people.

How blockchain is transforming cloud storage

Enhancing data security

Blockchain is actively transforming cloud storage and its approach to data management. Combining these two technologies has contributed to numerous benefits. The transformation of cloud storage helps solve many challenges while advancing existing capabilities to offer greater performance and efficiency.

Blockchain-based cloud storage has led to increased security and efficiency in data handling. This newly modified system enables users to interact in a secure peer-to-peer (P2P) network that utilizes a decentralized system.

In a decentralized system, data remains distributed across several nodes, ensuring that unauthorized parties cannot access an entire data file for a given company. This is one of the weaknesses experienced by cloud storage providers.

The encryption keys in the blockchain ensure that unencoded documents remain accessible to end-users only. The aim is to ensure that unencrypted data is not accessible to the public.

Safeguarding data from modifications

One issue that cloud storage providers experience is the likelihood that stored data may be altered by authorized users. Blockchain’s system ensures that this does not happen by preventing any changes to original data.

This means that once an entity feeds data into the system, it cannot be modified later. Blockchain tracks and affirms that an existing database has not experienced any changes. The method ensures that data retains its original format.

Ensuring transparency

Blockchain models allow users to observe all data transactions made on the network. This makes it possible to track how data moves from one point to another in the network. This aspect is also essential in validating network transactions.

Cloud storage also uses a model that allows privacy to thrive. In the past, companies could hide some or all of their data from users. Therefore, some firms may be unwilling to embrace blockchain due to increased transparency.

The current blockchain storage products available

Blockchain is still at its early development stage, and only a few companies have managed to develop products related to this technology.

Some of the known blockchain storage products include and

Filecoin is another product that lets individuals mine coins by sharing storage space.


Cloud storage plays a significant role in offering safe online data storage. However, blockchain promotes data security through its decentralized system that permanently limits data modification and deletions.

As organizations explore blockchain implementation, there is no denying that it has its share of challenges. In particular, its rising costs is a discouraging factor. Nevertheless, it remains a viable option for companies whose desire to uphold data security outweighs the associated costs.

Happy learning!

Further reading

Peer Review Contributions by: Wanja Mike