Siacoin is a cryptocurrency, produced by computers solving complicated algorithms. Its developers also came up with the idea of sharing vacant hard drive space using a similar decentralized approach as the blockchain that underpins the cryptocurrency.

This idea of sharing data between multiple entities isn’t new but using Siacoin to make sure that transactions a genuine and that contracts are honored certainly is.

Siacoin transactions follow the typical approach of awarding the miner a fee for their services of verifying transactions and mining coins. Each of those transactions may optionally contain data that relates to output, file contracts and proof of storage. Because its data is distributed, these last few optional fields ensure that clients’ data is stored complete with access rights and backup capabilities. Contracts between client and data storage space provider are included in the Siacoin blockchain.

How much data it is stored by each provider is calculated as proof of storage (in contrast to Proof of Work for Bitcoin and its alternates).