What Is Siacoin? How to Buy Siacoin? Is It a Good Investment?
What is Sia (Siacoin) and why do we think it could change the way we look at data storage? Sia is a decentralized cloud storage platform that uses a blockchain to facilitate payments. Is Siacoin a good investment and how to buy Siacoin? Read on and find out more.
Disclaimer: The content below should not be taken and viewed as investment advice, but only information and opinions. This article is for information and illustrative purposes only.
What Is Siacoin?
You might have heard about Amazon and Dropbox. They are both centralize cloud storage platform and the data is stored on a third party server. Conversely, Sia is a decentralized remote cloud storage that put control of personal data back into the hands of its users.
It removes the centralized server, which reduces the storage costs and at the same time protects the user’s data privacy. A group of data is contained by keys that only the uploader holds. Sia put the users in the control, rather than the server itself.
The distributed nature of the Sia network enables many optimizations in latency, throughput, reliability, and security.
Data files on the Sia network are securely and automatically encrypted with industrial-grade algorithms, using blockchain technology to track and ensure full integrity of the network. The encrypted files are spread across multiple nodes. Nodes are simply referred to data communication equipment.
The decentralized nature of the Sia network enables anyone with storage to get paid, lowering the barrier to entry and reducing the overall price of cloud storage. Their technology could be backing the next Dropbox or Amazon AWS. Siacoin’s blockchain technology could be the solution to the high hosting and storage costs of Amazon and Dropbox.
Breaking into this market is a multi-billion dollar endeavor. The long-term goal of Sia is to be the backbone storage layer of the Internet.
Sia uses a cryptocurrency, Siacoin (SC). Siacoin is the designated cryptocurrency used on the Sia decentralized data storage platform which is essentially a peer-to-peer network of hard disk drives individually connected to the network allowing the disk space on those hard drives to be used or recovered for data storage by people all over the world.
All payments on the network happen in Siacoin, which is a critical component of the cryptographic Service Level Agreement (SLA). Siacoin allows them to do things that would not be possible with Bitcoin or traditional online payments.
Should I Buy Siacoin (SC)? Is It a Good Investment?
The Siacoin (SC) is the token used in the smart contracts to pay the hosts. When a smart contract is created, the renter and the host both put Ssiacoins into the contract. The host gets the Siacoins only if they still have the data when the contract expires.
Siacoin is subject to speculation and there have historically been large price movements. Because the host adds collateral to file contracts, the host assumes most of the risk of a volatile price. Price increases can only benefit the network, but price drops can impact the host’s revenue.
Severe price drops, where the price cuts in half or worse, can put files at risk of being dropped by hosts, but even large price drops such as 25% do not put data at risk.
If you take account all the hard drive waste we have that lies useless all over the world, the price of Sia cloud memory being fraction of the today’s standard and income that can be easy enough to be generated by anyone just by connecting computers to the network.
The developers of Sia have a clear vision of next few coming years of the technology. Taking into consideration that world’s 90% of the data is produced in last 2 years, we can imagine the amount of data to be produced in next few coming years.
Buying Siacoin means that you buy a future on a peer-to-peer storage network called Sia. If Bitcoin replaces gold bars, Siacoin replaces hard-drives. Siacoin is a storage currency that can be considered as crypto-commodity with strong fundamentals and P-o-W mineable.
I personally believe that the Sia project has a bright future. Therefore, I acquired Siacoins and added them to my long-term cryptocurrency investment portfolio.
Where to Buy Siacoin?
There are several major exchanges you can buy Siacoin.
Based and fully regulated in the USA, Bittrex is the go-to spot for traders who demand lightning fast trade execution, stable wallets, and industry-best security practices.
Poloniex is a US-based cryptocurrency exchange offering maximum security and advanced trading features. Start trading in minutes. All it takes is a few simple steps.
YUNBI is a future-oriented exchange for blockchain assets. Founded in Beijing, 2013, and built with the code released by Peatio Open Source Project, YUNBI adheres to the principles of integrity, transparency and being open-sourced, offering customers a safe and easy trading platform.
Note: It is fairly easy to buy Siacoin on Bittrex, Poloniex, and Yunbi. Simply follow their instructions for setting up an account and depositing funds. As these cryptocurrency exchanges offer a different environment for acquiring Siacoin in that you must buy it by fulfilling other traders’ sell orders. This means that prices may vary, sometimes widely.
How to Buy Siacoin?
There are very few direct fiat gateways into Siacoin, for those who reside in countries that don’t have direct access to Siacoin. That means the vast majority of people who buy Siacoin did it with Bitcoin. Bitcoin is the first coin that most people buy so it’s hard for a different crypto to overtake the value.
STEP 1: BUY BITCOIN
There are many ways to buy Bitcoin. Perhaps the easiest way is through Coinbase or Coinhako. Once you have purchased some bitcoin, you are ready to buy some Siacoin! Buying Bitcoin is straightforward.
Registration is pretty straightforward, requiring things like your name, email, and a verification of your identity (eg: pictures of your driver’s license, etc). Once your account is created and verified, you’ll need to add a funding source like a bank account and/or a debit card. Once this is set up, you can buy some Bitcoin.
The reason I encourage my readers to buy BTC from Coinbase because you will get $10 free BTC once you trade your first $100 through Coinbase.
STEP 2: Set Up the Trade on Shapeshift
Exchanges of Bitcoin and Siacoin can be done through Shapeshift. Their service is super simple; you don’t even need to register on their website. You just send them some Bitcoin and they send you back some Siacoin. Unfortunately Shapeshift charges really high fees, which is fine for something like a $5 purchase, since losing 7% to fees isn’t a big deal when it means losing 40 cents.
To do this, you will first need an SC address, so that Shapeshift can send the Siacoin back to you. You can open an account on Poloniex. Then go to Poloniex “Balances, Deposits & Withdrawals” from the “Account” button on the top right menu. Then click “Deposit” from SC. Then you will see a string of characters will pop up and that’s your Siacoin Deposit Address. It looks like this:
Next, you’ll want your Bitcoin address from Coinbase, which can be found on your main account screen. In the upper right click on the link “Wallet address”. A string of characters will pop up like this.
That is the address you’ll need for Shapeshift. In case your trade has a problem, they will send the Bitcoin back to that address.
Next, you’ll go to ShapeShift.io and set it up for Bitcoin-to-Siacoin trades by clicking on the two big currency logos, and then click “Continue”.
Now Shapeshift will ask you for your Siacoin and Bitcoin addresses. Paste both of these into the boxes (ignore Payment Id) and click “I agree to the Terms”. When everything is ready, click “Start Transaction”.
STEP 3: Send Bitcoin to Shapeshift
With Shapeshift awaiting a deposit, go back to Coinbase. On the “Send Funds” page, paste the Shapeshift address into the “Recipient” box and type the amount of Bitcoin to send into the “Amount” box. Type the BTC amount into the box and click the blue “Send Funds” button. Click “Confirm” on the box that pops up, and your Bitcoin is officially sent to Shapeshift.
Finally, go back to your Shapeshift trade. Hopefully, everything went smoothly, and the white “Deposit Received” has turned green with a checkmark, meaning Shapeshift got your funds. Eventually both “Exchange Complete” and “All Done!” should receive checkmarks too, which means Shapeshift has exchanged your Bitcoin and sent Siacoin to your wallet.
STEP 3 (Alternative): Send Bitcoin from Coinbase to Poloniex Exchange
There are some weaknesses with the Shapeshift process outlined above, specifically that their exchange rate is pretty bad. Therefore, you can choose to send Bitcoin from Coinbase to Poloniex (one of the biggest exchange for Siacoin) directly.
Go to Poloniex “Balances, Deposits & Withdrawals” from the “Account” button on the top right menu. Then click “Deposit” from BTC to get your BTC address
Now paste the Bitcoin deposit address you got from Poloniex into the “Destination” box and type in the amount of Bitcoin you want to send.
Just one click and your funds should be on their way to Poloniex. It will take a bit of time, perhaps 15 minutes or more, for your Bitcoin transfer to complete.
Step 4: Trade Bitcoin for Siacoin on Poloniex
Now that your Poloniex account is set up and you’ve transferred some Bitcoin over, it’s time to actually get some Siacoin! To do this, go to Poloniex’s SC/BTC exchange. Here you’ll be greeted with a historical graph of Siacoin’s changing price.
To trade your Bitcoin (BTC) for Siacoin (SC):
- Click the underlined number next to “You have”. This will set your trade to include your entire Bitcoin balance.
- Click the underlined number next to “Lowest ask”. This will set your trade price to the lowest current seller.
- Click “Buy”.
You just exchanged Bitcoin for Siacoin. Be aware that there often isn’t much Siacoin for sale at the very lowest price, so you may need to repeat steps 1-3 a few times until all your Bitcoin is exchanged.