A startup called Storj Labs Inc. has launched an open-source, distributed cloud object storage platform built on blockchain technology that encrypts files across a peer-to-peer network.

The company is essentially crowdsourcing storage, enabling individuals to share their unused storage capacity in a secure way that makes use of bitcoin’s blockchain technology.

The solution relies on a community of “farmers,” users who rent out any additional bandwidth and storage space they might have available. These farmers get paid at a rate of 1.5 cents per GB of storage they rent out, payable in bitcoin, naturally. In other words, Storj is offering individuals the chance to rent out the unused capacity in their desktop hard drives and become part of a cloud storage network to take on big-name companies like Amazon Web Services, Google Inc., Dropbox Inc. and others.

But why would anyone want to use Storj instead of one of the established companies above? Well, Storj claims that its method is an order of magnitude more secure, is 10 times faster, and about half the price of the aforementioned data center-based cloud storage options. Storj is more secure, the company claims, because it uses the blockchain as a transaction ledger, for public/private key encryption, and for cryptographic hash functions for security. In addition, Storj said its service is less susceptible to hacking, censorship or demands from law enforcement agencies.

“The decentralized aspect of Storj means there are no central servers to be compromised, and because of the use of client-side encryption, only the end users have access to their unencrypted files and encryption keys,” said Shawn Wilkinson, chief executive and chief technology officer of Storj.

Wilkinson co-founded Storj in 2015 with $500,000 in non-equity funding, and the company has since raised $3 million in seed financing from investors such as Google Ventures, Qualcomm Ventures and others. The company also secured an additional $1.8 million from tech incubator TechSquare Labs in May.

Storj said its community has grown to more than 8,200 farmers who are currently renting out hard drive space and bandwidth for any takers. It also claims more than 15,000 users of its application programming interface worldwide. In addition, the company has secured a channel partnership with Salesforce.com Inc.’s Heroku, which offers a platform-as-a-service for developers to build, run and operate applications entirely in the cloud. By teaming up with Heroku, Storj can offer its distributed object storage solution to developers using that platform.

It remains somewhat unclear if there’s an enterprise play here. The service has the potential to catch on quickly with the significant number of consumers who don’t like to place their trust in big companies such as Google and Dropbox, but enterprises may have concerns with such a novel concept. Then again, some enterprises might find the idea of renting out their own storage space to be tempting.

Image: Storj Labs