Let's talk about the elephant in the room: The Storj economic model (node operator payout model)

You’ve blown me away with your counter argument… I don’t know what to say…

Anyway, yes, Backblaze is further along in their growth. But no company gets to just skip that phase. And yes, it doesn’t matter what you and I think. I’ve argued several times that Storj has more to prove. This just isn’t the right argument.

Why should it be cheaper than Backblaze at all? Backblaze is cold storage, Storj is hot storage. It should more clearly position itself as such and not try to compete on all markets.

Coldstorage is probably a much bigger market, but hot storage is more profitable. But that is also the issue with the customers. Because they can’t estimate how much they have to pay at the end of the month. That’s why many large companies moved their data from S3 into their own infrastructure.
These customers are gone for Storj, they already manage their own infrastructure, they won’t move. The difficulty is to find those companies which are still using S3 (or comparable), but are hesitant to build into their own infrastructure. Those might happily accept the savings in cost that Storj offers.

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I’m working in a small business who has ~50 TB of storage to back up. Apparently saving around 1kUSD yearly (including differentials) would already enough… if we didn’t have an el-cheapo version in form of the boss keeping offline backups at his home :person_shrugging:

Tesla wasnt my example but lets keep looking at it in the money making perspective.
We establisht that already big brands doesnt really give away free stuff neither offers discounts. I mean you can take a tesla for a test drive but thats for a day or so. You dont see tesla commercial on tv or anywhere else where tesla paid for marketing. So how is it possible everyone knows about it?

Its called product oriented marketing. You are focusing to make the product so good it sells itself. You throw in the mix some referral program then people are actually selling it for you.
So just from this how can you make STORJ better? Throw away the 150gb free storage instantly and make a referral program. People who pay for storage can intive 1-3 persons ( depending how much they pay ) and get 50gig free storage with the same limitations like now.
People will feel more exclusive because its invite only, creates a demand. PAYING customers have paying friends usually as rich people have rich friends. More chanche that free STORJ space will be converted to a paying customer.
Imagine trying to convert a cheapo student who came for the free 150gig space :wink: its like google to try ask money for gmail.

So I think “retarded” Elon is onto something here.
Then there is how he creates demand for the cars. Stupid things like you can change the horn for babyshark and you attracted an another 100k customer who thing this is “cool” or different.

STORJ needs to find his “cool”.
Prices need to go up, no discounts, just clever marketing.

What I wanted to say is that it’s marketed as a backup solution. Cold storage, for data that is not downloaded often, in best case only uploaded. You can also see in their pricing 10 USD/TB for Backblaze compared to 7 USD/TB for Storj. Even storage itself is more expensive 5 USD/TB (Backblaze) compared to 4 USD/TB for Storj. But as mentioned before they have the “bigger” name. That’s why I said Storj should not even compete with them and market itself for hot storage (data that has more egress). Every SNO would be also happy to provide more egress.

That’s exactly what I said in the next paragraph after your quote.

Yes, I was just pointing out, that large customers, everyone wants large customers, are moving into their own infrastructure. So focus should be on medium large customers.

S3, Google Cloud and similar, maybe even CDN (Cloudflare for example). Everything which has the focus on storage + traffic.

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This was a generic roadmap item that was a collection of things. We completed those and closed this roadmap item. It doesn’t mean we are not working on it.

S3 gateway compatibility continues to be a priority, so please report any issues you find!

If you look here, we have UploadPartCopy and Object Versioning under consideration, both of which are S3 gateway items :smile:.

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Today we deployed to all satellites the feature to fund your balance with a stable payment address. You could now set your node payout address to be your satellite payment address. Obviously you could have transferred earnings before this was released but this makes it much less manual.

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This is just my believe, but I think only basic, already supported, api features are used by most companies.

Because it’s cheaper. If they use glacier than maybe not, but that is again the backup area, which is less interesting for SNOs and Storj.

That should be standard legal stuff.

Backups are OK, but not the best. As a SNO you get paid for storage and egress, so you want both of it a lot. Backups are mostly storage. Wasabi is an even bigger hurdle, since they don’t have egress costs, I would choose them over Storj if I have a lot of traffic. Storj can’t compete with that in terms of pricing.

The question you raise about whether Storj DCS can effectively compete with AWS is definitely a valid concern. Any time a startup wants to offer a disruptive service to compete with an established and entrenched provider, there will always be some consistent hurdles to clear. Every startup has to answer the viability question and I think we have a much more compelling answer than a lot of other startups out there.

We’re not the first to take this challenge, others have entered the market with a “me too” approach of offering the same service based on the same model. That approach takes hundreds of millions of dollars in CapEx just to get off the ground, but the size of the market for cloud storage and the ability to carve off a niche makes it a very attractive target for the right business model.

Storj has a unique approach in that we’re able to source capacity with OpEx as opposed to CapEx. The characteristics of the software are flexible and can be tuned to meet a variety of use cases. Today we’re going after an initial set of use cases where we are actually already winning business from existing AWS S3 users. We see a bright future where different providers operate satellites in the Storj ecosystem addressing a much wider range of use cases. We’re proving that the model works.

Are there real advantages to distributed to decentralized object storage over traditional centralized object storage? Absolutely. Is that true for all customers, all use cases and all data? Of course not. Ultimately, it comes down to whether customers pay to use the service.

Where are we winning? Today customer traction is driven significantly by price. With the current state of the economy, it’s hard not to at least consider a product that lets you shave a zero off your cloud storage bill. We don’t just differentiate on price, because if the service isn’t good - if it doesn’t meet the customer’s requirements for a given use case - no one will use it no matter how cheap it is. There are a number of dimensions where we have an advantage, and these are dimensions about which customers care and consider in buying decisions:

  • Privacy - All data stored on the Storj DCS service is encrypted (both data and metadata) and users own their own encryption keys. This means that users are in control of their data and that data can’t be compromised or mined. Beyond the end-to-end encryption, Storj offers a unique access management capability that delegates authorization to the edge. The access management model is a capability-based model as opposed to typical access control lists. This means that not only is the data kept private, but how data is shared and with whom is also kept private. We are working on SOC2 compliance and offer geofencing to specific regions to address concerns related to compliance concerns related to regulatory frameworks such as GDPR.
  • Performance - Because data is broken up into segments and erasure coded pieces and distributed over a network of tens of thousands of nodes, there is an enormous amount of parallelism inherent in the network. Data transfers are able to take advantage of that parallelism to achieve very high throughput. The network attempts to transfer more pieces than are actually required when uploading and downloading. This method not only reduces the impact of the long tail effect related to slow nodes. The net result is significant throughput - we’ve seen transfer speeds of 24 Gb/s to almost anywhere in the world, with just a single copy uploaded. That’s without replicating to multiple geographies.
  • Durability & Availability - With pieces of data distributed over thousands of nodes, operated by different owners, in different geographic locations, on different power supplies, on different network connections, and with all components of the network operated in a multi-region, highly available architecture, The loss of a single region or even multiple regions does not impact availability or durability of data. We conducted an analysis on the potential impact of the conflict in Ukraine, and if we were to lose availability of all nodes in Ukraine and Russia, there would be no impact to durability of data. We offer an SLA that meets or exceeds enterprise requirements with 99.95% availability and also provide eleven 9s of durability.
  • Environmental Impact - Storj DCS also represents a very efficient use of energy in the manner in which data is stored. Most of the hardware in service on the network was space on existing infrastructure already in operation or was recycled by the node operators contributing capacity to the network. Storj doesn’t need to build data centers to provide its service but rather extends the usable life for storage hardware. Storj also does not have a blockchain in the storage process meaning storage and retrieval of data does not use excessive energy in the process. Storj uses an ERC20 compatible token on the Ethereum blockchain for payments to node operators, which post-merge has one of the lowest energy footprints for token transfers. Storj currently purchases carbon offsets for the energy used making it incredibly energy efficient.
  • Economics - Cloud storage prices haven’t changed much in a long time despite the precipitous drop in storage hardware prices. Competing with hyperscale cloud storage providers requires a huge capital investment to build data centers, rack servers, hard drives, power supplies, network connections, etc. Decentralized cloud storage takes a completely different approach by crowd-sourcing capacity via opex, not capex. By tapping into massive latent capacity all around the globe and paying only for what’s used. Decentralized cloud storage delivers comparable durability and availability to centralized cloud storage, with superior privacy and performance, at a price that is 80% lower than AWS. In the current economy this has become very compelling.

The cloud storage market is a very hard market to crack. We’re seeing steady growth in consistent use cases. We’re getting traction with very credible technology partners servicing enterprise customers.

We have actual partners bringing customers to us from hyperscalers. We have direct customers who have migrated from on-premise solutions and other cloud providers. We are absolutely a credible alternative to AWS for a number of use cases.

If there are features you want to see that would improve the service, better meet an existing use case or unlock a new use case or market, please let us know.

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Important: Please note that if you do decide you want to specify a STORJ deposit address you have generated using our new native STORJ deposit feature for customers as your new node payout address - this will only work to receive payouts via Layer 1, it will not work (yet) if you have opted in to zkSync!

So please, do not change your payout address to a native STORJ deposit address if you have been receiving node payouts via zkSync.

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This “use only unused resources” thing is so… pretended.

Maybe I live under the stone, but I don’t know many people who has spare 4-6-10TB HDDs laying around, unused for a year or so…

If you have an old 1-2TB drive and start a node with it, it will fill very quickly. November was extreme, but ingress was around 1,3TB for a single node/IP. A 2TB drive will fill in 3-4 month and the node operator will buy a brand new drive (if he is ready to invest), or will face with the monthly ~2 USD net income (and leave).
This is the reason why we have this whole topic here. The node operators are not members of the International Committee of the Red Cross, but everyday people who made investment decision by buying new hardware to run this service.

I had 10TB spare when I started. I’ve expanded since then, but I still only use hardware that would have been online 24/7 anyway. Only with more HDD’s attached now. So no… it’s real. It just may not be for everyone.

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I also had a spare 4TB and 2x 2TB drives and an unused RPi 3B+. I started with the 2TB drive and practically earned nothing in the first year…
But looking around in the company I work for… some 80 people and I’m the only one who ever heard about Storj (even though I know some “ex-miners” in the company). I remember, once I talked about it with someone and he looked at me like I’m an UFO for running the node with so many hassles and so little income…
If I want to grow from the monthly 25USD income, I need to invest into hardware… of course some second hand, used stuff, but it will work… but I need to invest.

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This “use only unused resources” thing is so… pretended.

I definitely know companies with large SAN’s sitting mostly empty.

Whether we can convince those companies to join the Storj network is another question. Maybe this is an opportunity for a Storj procurement officer.

Assuming they follow the ToS and only run one node in one location the most they can get is, what, $70/month for one location (in tokens which then need to be exchanged)? Would that be even worth the time spent to set it up and manage it?

In general, I agree with @Balage76 . Most people do not have large hard drives sitting unused and using small drives may not be worth it for most. A small drive may be useful at first, until it fills up, but the node operator will have to expand the node or run many of them (according to the ToS on separate servers).

I bought the server for Storj v2 (but never came around to using it) and I bough the hard drives for Storj as well. Yes, I am using the server for other things, not just Storj, but without Storj I probably would have used another server or done things differently.

Yeah, same here. A 60TB NAS sitting half-empty at my office. No permission to set up a node though unless I’d promise I could scale it back at moment’s notice in case the business would need the space. Partial graceful exit would be useful ^^

most of my 70 nodes, that mostly 3-4 TB hdds was unused, after I updated some of them to 8,10,12, 18 TB HDDs, first servers was also unsuded, but after I invested some money from incom from storj to buy new servers.

70 nodes… :man_facepalming:t2: man, I can’t imagine how huge is your multinode dashboard. :rofl:
This is the definition of commitment.

Yes Vadim, but you are everything but a typical Storj node operator! :smiley:

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