Maybe because you can have both a storage node offering storage to others and back up your personal data on other nodes, making it a sort of disk space exchange. That was one of the ideas for Storj some years ago.
Iāve been trying to wrap my mind around how the Storj business model could ever work for quite some time, and tbh I donāt think it can. Letās quickly look at https://storjstats.info and estimate what Storjās income is right now:
There are 3 satellites that actually store production data, AP1, EU1 and US1. Together, they store 8,300TB of data currently. So that makes 33,200$ in monthly income for Storj. In addition, we have egress, which in the past 30 days was 2,731.1TB which equates to an income of 19,117.7$.
This ignores the fact that Storj probably gives discounts to big customers.
Letās assume that Storj pays all the node operators from their Storj reserves, then they can keep the whole 50k USD.
From this they need to pay satellites and their developers. Obviously this isnāt even enough for a single developer. So they need to scale immensely, getting to (hundreds of) exabytes of data stored (and node operators offering this storage) before they run out of Storj reserves while simultaneously heavily reducing node operator rewards so that they can earn something. I donāt think this will work. Iāll enjoy being a node operator while it lasts and is at least a bit profitable, but I wonāt invest a penny into hardware and keep a very close look on when it might be profitable to spin down my server disks instead.
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That was the plan all along, as I understand it. The key to making it work is in execution, and this is what we (attempt to) discuss here. Are you worried about some specific elements of this plan?
Yes, I am worried that we are only in the beginning of the petabyte phase and they already need to reduce payouts. I think their runway isnāt long enough that they will become profitable before money/Storj runs out.
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Itāsā¦ uhm, expected to have to correct the course? Canāt plan everything upfront.
If they can keep showing exponential growth, they will have the opportunity to attract investors as well. Token reserves arenāt the only way to get a runway.
I used to use a now defunct service called Symform, which had a really simple business model. You share 2TB of space, you get 1TB of storage. The clever part of that is that people always share the entire storage space before using the full 1TB themselves. With a little tweaking of the RS settings, Storj could get the expansion factor down to 2x (lower when segment availability drops towards repair threshold) and basically pocket the extra storage space for paying customers.
Youād have to do some checks to balance egress use as well. But this could be provided as a single package to run on NAS systems for example. With minimal setup. You could get large amounts of extra storage space by simply offering free storage to NAS users. And all extra space provided could be used to serve paying customers and Storj could pocket all that income.
These NAS users will usually be low egress users (mostly backups), while they can provide decent egress traffic. So Storj could also make money on the egress balance potentially. And it would be quite reasonable to limit these kinds of users to at most 100% egress of stored data per month to ensure this balance doesnāt get out of whack.
It would also allow Storj to get rid of all the complexity and barriers to entry tied to crypto wallets for payments etc. And when choosing a backup provider on a NAS you have a really unique option available to users that would probably attract a lot more customers than āitās cheaperā because you can market it as āitās free!ā.
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STORJ has only one problem the way I see it and thats marketing.
Did you ever see anyone walking into a lamborghini, ferrari, apple store etc etc and ask for a discount? No. You have to market on being greener, secure or whatever but not being cheap. If you do that you need to be cheap forever which will not work as many did the calculations above.
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I like Backblize store page, with those dedicated buttons for different situations. Attracks the individuals.
That would be a great analogy if Storj were anything like those big name brands. Sticking with the car analogy, Storj is just like one of the first unknown electric car brands that now needs to prove they are Tesla and not one of the many failed attempts that came before and alongside it. They are asking people to trust something new.
Furthermore, thereās no such thing as luxury data storage. This is a commodity market where you have to compete with incumbents. And there is no way to market over the top luxury because absurd prices simply donāt find customers in this space. In tech, when you introduce something new, you use your runway to gain market share. Ćber still loses money on every ride. Thatās just how it works, you show your worth, get more investors and show your worth some more. That exponential growth curve is exactly what investors are looking for, so I think there will be opportunities like that for them. A solid long term economic models would be the second thing investors look for. So thatās on track too. More customers leads to more trust and a bigger name and that snowball can start rolling fast. Itās a solid product, itāll get there. But it just needs some time.
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I understand this. Tesla doesnāt sell their cars 80% under their competition. Not even their first one. If you offer the same like Amazon AWS dont ask 80% less for it. Instead market it cleverly.
You knowā¦ there was a second part of that message all about how car markets and tech markets are not the same.
But lets set that aside for nowā¦ lets have a look at Tesla.
Oh myā¦ it sure looks like they only had losses for a long time. I guess they did sell their cars for less than they cost after all.
Yeah and mean time did tesla reduced the payment of their workers?
There is no company that survived who marketed as cheaper than the competition, regardless the industry. No one does that. Stand up for something.
I wouldnāt go there with Elon Musk at the head, haha. Probablyā¦ yeah. At the least they demanded unpaid overtime. (also node operators arenāt workers, but suppliers)
And you can point to Amazon, sure thatās an 80% difference. But people WILL also be comparing Storj to backblaze and wasabi. Both of which are only slightly more expensive. And the argument that Storj is better than those holds less water if you donāt have a name yet. So grab that market share first, THEN compete with the services that provide similar quality.
In the mean timeā¦ take a look at this page: https://www.capterra.com/backup-software/compare/155180-175835/Backblaze-for-Business-vs-Storj
Thatās the kind of site people use to compare these services. Can you tell from that that Storj is better? Similar customer ratings, less features listed. Nothing about performance. People only give Storj a serious look with such comparisons if itās also cheaper. Itāll get there, but right now, they need to grow market share and convince people.
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Your math makes a mistake here, Iāve done this before myself when calculating things. You properly pointed that Storj makes 50k per month, and then stated that this wasnāt enough to cover one developer. Thatās because you likely thought of that 50k as yearly income. It is monthly, so the income based on your math would be 600k. Which covers more than one developer and then some.
Also, consider all of this onboarding that is going on with new customers. They are potentially bringing their data into Storj. Some are evaluating, some are fully on boarded, and many are in process of transferring their data into Storj. That takes time when you are dealing with large data sets and narrow bandwidth on their end. Data continues to grow. Revenue will as well.
John stated he wants Exabyte storage availability. This isnāt because the company wants that much empty storage lying around. There is a plan here that weāre going to NEED that much storage, and then some. We are just in a growth phase. If you look where we were a year ago, and where we are now, you can pretty easily see where we are headed. A lot of very smart and dedicated people are working night and day to make Storj great.
The numbers are going to change. We know that. Weāll have to wait and see what the plans are for SNOās. Revenue though, it is growing. Stay tuned.
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Whenever there is talk about payouts on a forum, the tread tends to become huge 
Iām on the positive side too. If I didnāt belive in the success of the project, I wouldnāt invested almost 7000$ in it.
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I Agree, people will be comparing but not on priceā¦ Backblaze is far ahead of Storj on S3 api compatibility, the price isnāt the highest priority. I Agree with the other poster, that cost is a race to the bottom.
S3 is now increasingly the standard for data tier applications, and itās come about really quickly - Thatās a really exciting opportunity for Storj given the estimated throughput and redundancy that can be offered, butā¦
Storj S3 implementation is fine for basic backups, but itās missing soooo much of the S3 api specifically versioning, and more on the multi-part that itās not a simple migration for apps using these features.
Furthermore, the point of my comment was when you compare the backblaze S3 support
to things like this in Storj Github maybe I read wrong, but it reads like S3 API development is shelved, pending individual requirements to implement, they have also dropped out of the roadmap, like the ability for the community to run their own Satellites was under Dev, and now itās like itās not happening any time soon.
Please fix the S3 gateway, it will open up more opportunityās - I understand the technical issue around that, but it has to be addressed at some point ? or not.
CP
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You are right. @John has even admitted in one of their Twitter spaces that they had a totally wrong idea about getting customers:
i remember early on we had a a theory that our hypothesis was that it would be hard to find people to contribute capacity but it would be easy to find people who would use the space and we actually had it exactly backwards right it was new technology so people were very reticent to adopt it from using it to store their data perspective but anybody we found it very easy to get people to contribute space
But that has obviously changed we see a lot more effort to attract new customers than before. Still there are tons of things that could be done.
Such sites are very good and helpful, but Storj would need to keep track of them and check if information listed is accurate so they remain informative. Sometimes information is false or outdated.
Another thing is that that there are a lot of articles written or sometimes even partners that spread false information, babbling about blockchain storage which is not only outright wrong, but can also repel potential customers. I would say that at the current state of cryptocurrencies, most serious (enterprise) customers donāt want to have anything to do with blockchain or cryptos.
Here are 2 examples of that. Storj should invest some effort to ensure that information is correct:
Users enter into peer-to-peer (P2P) smart contracts on blockchain-based decentralized storage node.
https://www.coingecko.com/research/publications/the-state-of-decentralized-storage
Some decentralized storage networks may charge different fees for uploading (ingress) and retrieving (egress) data. For example, Storj charges a fixed price of $7 / TB to upload or download, while Sia costs $0.41 / TB to upload and $2 / TB to download.
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Maybe you do want to pay 1 USD/TB less.
yeah, wellā¦ knowing the biggest retarded ever (Ellon, who else?), there might have been reduced payments along the way. If not reduced payments, working overtime with severe exposure to covid certainly happened. Not the best example, manā¦ letās find another one. Maybe not from the US of A?
Are you saying this is unlike backblaze? Backblaze Earnings & Revenue 2014-2024: (NASDAQ: BLZE) Earnings Date | WallStreetZen
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