Covalent is the #1 data provider of blockchain transaction data to some of the world's biggest corporations, investors, consulting firms and decentralized app companies.
We report on blockchain and cryptocurrency market trends that are unbiased, independent, best-in-class, data-backed and most importantly understandable to the layperson.
We define the decentralized storage and sharing sector as platforms with the following key attributes:
Peer to Peer is one of the major pillars for the decentralized space. The fact that you can rent your unused storage on a decentralized platform to offset your costs is groundbreaking. This attribute allows for increased download/upload speeds because every file is being downloaded from a number of hosts across the network. Finally, P2P allows for the possibility of of incentivizing and decreasing storage costs further down the line as the network of peers grows with time.
The second pillar would be data encryption. Centralized platforms offer limited data encryption which can lead to security breaches. Encryption plays a huge role in the excellent security and privacy decentralized platforms have to offer. Data files are fully encrypted and broken into shards before storing across different hosts on the network. Thus, only the user who is uploading the data has access to it using their private encryption key. This results in unparalleled data security that centralized platforms cannot match.
At Covalent, we have assessed the storage platforms according to the following 5 critical capabilities. Decentralized storage platforms are in the nascent stage and are not targeting enterprises yet, and therefore, enterprises capabilities are excluded from the following.
We research the validity of decentralization thesis and if the disruption one of the following:
We analyze how the decentralized companies make money. Though most platforms are in their nascent stage, we enlist potential future revenue models in this sector.
We research how big the centralized market is and its Compound Annual Growth Rate (CAGR).
Most of the platforms in this sectors are in their nascent stage, so we use a couple of proxy elements – eg: venture capital raised and ICOs and growth of the cryptocurrency market to estimate the size of the opportunity.
We estimate the market penetration using the dollar value of contract executions on the various decentralized platforms.
We analyze the strength of the incumbents and the barrier to adoption of the decentralized technology. Barrier can include government regulations.
We use Covalent’s proprietary data and if possible, the platform adoption and token velocity to assess and rank the top players in this sector.
In this section, we list active and upcoming ICOs that look interesting. Our reports only focus on post-ICO projects that have traction and therefore this section is not a focus area for us.
Finally, we perform a SWOT (Strengths-Weaknesses-Opportunities-Threats) analysis on the sectors and close with our final thoughts.
|Amazon S3||Amazon Simple Storage Service is a storage service for the Internet|
|GB / TB / PB||Gigabyte / Terabyte / Petabyte|
|NSA||National Security Agency|
|CAGR||Compounded Annual Growth Rate|
|IPO||Initial Public Offering|
|ICO||Initial Coin Offering|
|GDPR||General Data Protection Regulation|
|HIPAA||Health Insurance Portability and Accountability Act|
|ERC20||Common standard for Ethereum tokens to follow|