Developer's Corner
May 30, 2023

4 Major Downsides of Centralized Storage Explained

Understand the major downsides of centralized storage and their implications on data privacy and security. Learn why decentralized storage is a better solution.

4 Major Downsides of Centralized Storage Explained

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Centralized storage systems have been around for a long time now and been a go-to choice for both consumers and enterprises alike. Some of the popular examples of centralized storage solutions include AWS, Google Cloud Platform (GCP), and Microsoft Azure, amongst others.

While centralized storage solutions have been widely adopted, their security concerns and privacy risks have led to the evolution of decentralized storage solutions. More on that later. For now, let us dive into exploring the major downsides of centralized storage. Read on.

Monopolisation of Costs

Centralized storage providers, such as Amazon, constantly employ tactics that let them monopolize costs and give users little to less options to choose from. Let us take Amazon’s case — the company is constantly accused of following predatory pricing — offering below-cost-pricing and running the risk of bankruptcy. When successful, predatory pricing can help squash competition in the long run. That’s precisely what Amazon is accused of.

It isn’t uncommon for companies that offer below-cost-pricing to substantially rack the prices up after a point of time. Then the consumer ends up with no other option than paying the price demanded, because there’s no competition and the cost has been monopolized.

We would then ideally want to choose solutions that offer a number of options and do not monopolize the market, such as decentralized storage options.

Less Control over Data

Be it AWS, Azure, or any other mainstream centralized storage provider, all are owned and operated by for-profit companies that have an infamous track record of profiteering off of user data. We come to Amazon, yet again. Now there have been countless allegations that Amazon preys into the data of its competitors on it’s e-commerce platform, and develops its own spinoff of all top-selling products.

You can even consider Google for that matter. Countless marketing companies went belly up because of the constant changes to the Google algorithm; ironically enough, many of those changes may have been inspired from the user data stored in their cloud. As long as the control of your data lies in the hands of a central authority whose sole motivation is to make profits, you’d always have less control over your data than you should ideally have.

Mismanagement of Data

Let’s begin with an example. Back in 2017, personal information of close to 200 million US voters was leaked due to a misconfiguration in the AWS S3 bucket. Names, birth dates, phone numbers, addresses, and even voter registration details, among others, were all up for grabs. Apparently, the repository hosting the aforementioned information didn’t have access protection. What this means is that just about anyone with an internet connection could have accessed the information. Amazon’s Simple Storage Service (S3) buckets are infamous as they’re found unlocked several times now, providing public access to data that was to remain private.

Incidents such as the one above and other similar examples underline the fact that centralized storage providers have reportedly mismanaged user data. Here’s what’s worse: in some cases, users would not even know if their data had been leaked and made available for free on the internet.

Non-transparent Pricing

Before we talk about non-transparent pricing, think about this: When data is stored in a certain data center at a particular location, it is vulnerable to any unexpected events such as an act of God. So if a company’s data is stored in a region ‘X,’ and if that entire region faces a cyclone, the data center in ‘X’ would inevitably shut down temporarily and wouldn’t let the company access its data. As a solution to this, most centralized storage providers offer “multi-region redundancy” through which they maintain a copy of the data at another location. While something such as this must be a fundamental offering, it is mostly offered as an add-on service. Hidden costs like these compel users to pay more for add-on services; because doing otherwise is a compromise on the reliability front.

Decentralized Storage: A Reliable Alternative

What is Decentralized Storage?

Decentralized cloud storage or blockchain cloud storage is quite literally the opposite of what centralized storage is. Similar to early peer-to-peer networks such as Napster and BitTorrent, decentralized cloud storage involves storing fragments of user data across multiple ‘nodes’ or computers in a network.

Whenever a user needs to download their data from a decentralized storage network, they simply download fragments of their data from various nodes in the network. Unlike a centralized storage system where data is stored and downloaded from a far way server, decentralized storage networks allow users to download data from geographically closer peers, resulting in superior data transmission speeds.

In any decentralized storage system, nodes in the network cannot view or alter user data and files due to the decryption measures that are deployed at the time of uploading data.

Centralized vs Decentralized Data Storage

Decentralized storage solves most of the problems that are associated with centralized data storage. Some of the key advantages of choosing decentralized cloud storage over centralized storage include:

  • Less costs of storage due to economies of scale
  • Fair pricing due to a non-monopolized market
  • Minimal file loss due to foolproof storage and distribution of data
  • Superior privacy and security due to an array of transparent measures

Check out our guide on decentralized cloud storage and learn more about how decentralized cloud works, its advantages, and what to consider when choosing a decentralized storage provider.

Arcana Network: Revolutionizing Decentralized Storage

Arcana is the decentralized storage layer for Ethereum, offering storage for DApps built on EVM compatible chains such as Polygon (Matic), Binance chain, and Ethereum. Apart from offering decentralized storage, Arcana also offers a rich Privacy Stack which offers a host of decentralized services that complement decentralized storage.

Our Privacy Stack offers decentralized storage with end-to-end encryption, non-custodial key management service (KMS), and Decentralized Identity and Access Management.

Through Arcana’s privacy stack, you can allow users to login and create accounts with email or social authentication to generate keys, store encrypted data, and securely share this data with others by allowing data owners to define access policies for who should get access, and for how long. The network takes care of managing the access and keys of users and their data, without relying on a centralised server or provider.

Want to know more about our latest testnet features? Book a demo.

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