Storj

Storj is a decentralized object storage platform that leverages a global network of independent Storage Node Operators to provide secure, private, and cost-effective data storage, functioning as an S3-compatible alternative to centralized cloud providers like Amazon Web Services (AWS). The network uses erasure coding to split files into encrypted shards, which are then distributed across thousands of nodes, ensuring data durability and availability without relying on a single point of failure. Access and payments on the network are managed via the STORJ token, an ERC-20 utility token on the Ethereum blockchain.

The architecture is built on three core components: the Storage Node software run by operators who contribute disk space, the Uplink client library used by applications to interact with the network, and the Satellite service which coordinates the network by managing metadata, node reputation, and payments. This design ensures that no single entity, including Storj Labs (the company developing the core protocol), has access to users' complete files, as data is client-side encrypted before leaving the user's device. The network's economic model incentivizes node operators with STORJ tokens for providing reliable storage and bandwidth.

Compared to traditional cloud storage, Storj offers distinct advantages in security, as the client holds the encryption keys, and resiliency, due to its distributed nature. It is particularly suited for use cases requiring high data availability, censorship resistance, or compliance with data sovereignty regulations, as files are stored across a diverse global network. Developers can integrate with Storj using its S3-compatible gateway, allowing existing applications built for Amazon S3 to switch with minimal code changes, tapping into the decentralized storage layer.

Storj operates on a client-serverless architecture, where users interact directly with the network of Storage Nodes without a central coordinating server. The core process begins with erasure coding and encryption. When a file is uploaded, the Storj client software first encrypts it using AES-256-GCM encryption with a user-managed key. The encrypted file is then split into 80 smaller, redundant pieces called shards using the Reed-Solomon erasure coding algorithm. This process ensures data durability and availability even if a significant number of nodes go offline, as only 29 of the 80 shards are required to reconstruct the original file.

These encrypted shards are distributed across the decentralized network. A core component, the Satellite, acts as the network's metadata coordinator. While Satellites manage the metadata—such as tracking which nodes hold which shards, processing payments in STORJ tokens, and auditing node performance—they never have access to the actual file data or encryption keys. The shards are uploaded directly from the user's client to the selected Storage Nodes, which are run by independent operators worldwide who earn STORJ for providing storage capacity and bandwidth. This separation of data and metadata is a key security and architectural tenet.

For data retrieval, the client requests a file from the Satellite, which provides the necessary metadata to locate at least 29 of the 80 shards. The client then downloads these shards directly from the Storage Nodes, decrypts them using its private key, and reconstructs the original file using the erasure coding algorithm. The network continuously monitors node uptime and audits data integrity through cryptographic challenges. Nodes that fail audits or are unreliable are penalized and their shards are automatically repaired by re-distributing the data to other healthy nodes, a process known as self-healing, which maintains the network's durability without manual intervention.

Token Economics (STORJ) refers to the cryptoeconomic system designed to coordinate and incentivize participants in the Storj decentralized cloud storage network. The native STORJ token is an ERC-20 utility token on the Ethereum blockchain that serves as the sole medium of exchange for paying storage node operators, compensating users for their contributed resources, and participating in on-chain governance decisions. This model aligns the economic interests of all network stakeholders—users, node operators, and developers—to ensure the system's security, reliability, and growth without a centralized intermediary.

The core mechanics involve a pay-as-you-go model where users spend STORJ tokens to store and retrieve data. Payments flow to Storage Node Operators who provide unused disk space and bandwidth, with earnings calculated based on verifiable proof-of-storage and data transfer. A portion of these payments is also allocated to Uplinks (the client software/developers) and the Storj DAO Treasury to fund ongoing development and grants. This creates a circular economy where token demand is driven by utility, and the satellite nodes (coordinating network metadata) act as automated market makers, setting prices and distributing payments.

Key design principles include cryptographic auditing via erasure coding and Merkle trees to prove storage integrity, which triggers automated micropayments. The model emphasizes predictable pricing for users, often below centralized cloud rates, and reliable income for operators based on verifiable work. Unlike proof-of-work mining, rewards are tied directly to provided utility. The Storj DAO, governed by STORJ token holders, oversees treasury funds and protocol upgrades, decentralizing control over the network's economic parameters and future roadmap.