The 21st Century has seen a massive surge in the cloud economy. Demand for storing and processing data is rising exponentially with no end in sight. That growth has brought a cloud regime that ultimately can’t be sustained. It has two primary features: cloud services today are provided by what amounts to a centralised oligopoly and as the number of users, and uses, grow there is less security, privacy and control.

Enter blockchain and the emerging revolution of distributed systems: decentralised, secure, stable and, arguably, more “democratic.” When this is applied to the cloud economy a new reality quickly comes into focus: the decentralised cloud, built as it can be upon blockchain technology, upends the current regime and creates a new cloud ecosystem for ‘the rest of us’; a global infrastructure operated by millions of small individual providers and contributors of cloud resources and trusted peer-to-peer commerce for everything from music and entertainment to financial services. What I envisage can be called the “Crowd Cloud.”

Fantasy? Not really. It’s within our grasp. Getting there will mean rethinking the old models for the funding and growth of start-ups. It will mean embracing, with all vigilance the new and daring, despite it being seemingly risky and complex.

Revolutionising The Cloud Ecosystem

The costs of cloud services have become a significant factor to businesses’ bottom-lines as the need to deploy cloud applications becomes essential to being a part of the modern economy. Over 90% of businesses utilise cloud services in some form, and Intel Security predicts that by mid-2018, the cloud will account for 80% of operational expenditure in companies’ IT budgets. That brings the cloud down to earth with a loud bump.

To feed this frenzy for data, hyperscale cloud service providers – Amazon Web Services (AWS), Microsoft Azure, Google Cloud, and so forth – go well beyond the scope of merely storing the data. They offer a wide array of services, including data backup, web hosting, remote computing power, content delivery, database management and remote software applications. As it stands, these hyperscale providers dominate the cloud; they provide 68% of global cloud infrastructure services, and 59% of cloud-hosted software services.

In 2017, the Synergy Research Group reported that just 24 hyperscale cloud providers control over 300 data centres across the world. “This space is an oligopoly,” said Trip Miller, the founder of Gullane Capital Partners and an investor in Amazon, in an interview. “No one else of any meaningful size outside a handful of major players is getting into it because they can’t afford to get into it.”

Until now, a lack of competition within the cloud space means that prices are unnaturally high. Because of the very nature of centralisation, systems also present privacy, security and reliability issues. To highlight the problem this poses, a recent outage of the Amazon Web Services’ S3 in March affected a large number of websites, including Imgur, Slack, Quora, Expedia, Twilio and many more, paralysing cloud-dependent businesses and costing S&P 500 Companies $150 million.

But the rise of decentralised cloud services, or “Crowd Cloud,” could change this.

The Crowd Cloud would address many of these issues, in the same way that Uber and Lyft revolutionised the way we hail cabs. Rather than storing and processing data in a centralised data centre, the decentralised cloud harnesses the unused processing power and data storage from millions of home and office computers worldwide. It could even use Internet of Things (IoT) connected devices, so that one day your washing machine could power the cloud in-between laundry cycles. Each of these devices within the decentralised grid is called a “GridNode”. GridNodes provide the data storage and processing power to support websites and mobile applications in the cloud, and are all interconnected to form a mesh network via blockchain.

Creating The Crowd Cloud

Let’s say a company wants to host their mobile app on this new decentralised cloud. How does it work? To achieve this, a relationship is established between the mobile app owner and the GridNode owner using a Smart Contract based on blockchain. This keeps a running receipt of the transactions. The GridNode owner is responsible for setting up the GridNode, connecting it to the decentralised grid via the internet, and ensuring it works. A blockchain-based cryptocurrency is used to send payments to the GridNode owner for the cloud services used by the mobile app owner. For you, the mobile app user, it works very much the same as traditional cloud hosting – you load the app on your phone using the cloud storage and processing power.

This decentralised model has a number of advantages over centralised cloud services. First, the distribution of data and logic across millions of computers or GridNodes, each one located in a different geographical place, reduces the risk of a hacker obtaining a hoard of sensitive information. With the right protections in place, the computer owner is unaware of the data and logic that is being performed in the GridNode.

Second, the Crowd Cloud reduces the impact that the failure of a single “Node” will have on the availability. As the failure of AWS Storage services shows, an opportunistic attack, power outage, or even human error, could easily cause a large data centre to fail – bringing down huge parts of the internet, and the infrastructure and businesses that rely on it. By distributing data across a broad geographic area rather than in one concentrated hub, the Crowd Cloud is less vulnerable to a system failure.

Third, in time, the Crowd Cloud could provide better performance for users who are not located in high-bandwidth regions – such as rural areas and undeveloped countries. If a certain application is used extensively in one area, and the decentralised grid supports this, then the application would migrate closer to the use area, reducing the distance between the server and end-user. This will improve the application’s performance and reduce internet traffic costs for the application provider.

Finally, a decentralised cloud creates a more competitive environment, and therefore better service at a lower cost. As it stands, users of hyperscale cloud services are locked in to agreements with little incentive to migrate to different providers or to use multiple providers. Within the Crowd Cloud, an application running on a GridNode might choose to leverage existing hyperscale cloud service providers, such as AWS, along with standard GridNodes from the decentralised network, without need for the user to set up multiple accounts. By accommodating third parties within the cloud network, users will have more choice in their cloud services, much as Airbnb has driven up the quality of accommodation at a lower cost. It is estimated that Crowd Cloud would result in up to a 94% cost reduction on average service criteria compared to current cloud services.

Entering The Mainstream

This isn’t a pipedream; there are already a number of companies that are paving the way for the Crowd Cloud. Storj, for instance, allows users to rent out unused storage space on their home computers, and rent space from others in return. In May, Storj raised $30 million in an Initial Coin Offering (ICO) of its cryptocurrency. Similarly, Golem enables users to rent out the Central Processing Unit (CPU) on their devices or pay to use other users hardware for computationally exhaustive task, for instance, rendering a video game.

However, in order for Crowd Cloud to succeed and become the preferred system for cloud usage, it has to enter the mainstream. As it stands, decentralised cloud services are fragmented & designed for specific usage, each with its own interface and cryptocurrency. This is cumbersome for businesses, who would have to dedicate more resources to train staff in maintaining their cloud services, and is a major disincentive compared to hyperscale cloud service providers. Introducing peer-to-peer decentralised cloud services in a simplified way, like, eliminates much of the need for businesses to exhaust resources in understanding and implementing the cloud.

Creating a common cryptocurrency within the cloud or “Cloud Token”, which keeps a running receipt of the cloud services used and the reputation of the users, will tackle many of the issues facing the Crowd Cloud. This minimises the transaction fees, initially reducing the cost of cloud services by half. Based on Ethereum blockchain, the cryptocurrency will eventually evolve to govern exchanges between decentralised peer-to-peer cloud services automatically. This creates an environment where the cloud can grow exponentially without the need for cloud service providers to build additional infrastructure or resources.

One of the other key barriers to mainstream adoption of the Crowd Cloud is trust. GridNode owners want to be sure that mobile application owners will pay them for their cloud services, and likewise, mobile applications owners want to be sure that they will receive cloud services as promised. Eventually, the blockchain will facilitate a reputational system, similar to the mechanism used by companies like eBay and Amazon to facilitate trust-building for the sale of physical goods. The blockchain will keep a record of how trustworthy a participant in the cloud has been so far is stored on the blockchain, including how quickly they pay for services, if they fail to pay, or if they otherwise break the terms of the Smart Contract, thereby building greater levels of trust between participants.

The potential for the Crowd Cloud is huge: IDC and Gartner forecast that the global public cloud service industry will reach over $195 billion in revenues in 2020, double from 2015. As more businesses and individuals take the leap into the cloud, to which they’re drawn to will be decided by cost, range of services, availability, ease of integration within their existing legacy systems, transparency of service and risk mitigation. The Crowd Cloud, with its combination of blockchain technology and decentralised structure, will revolutionise cloud services for the needs of the 21st Century.