What Is Web 3 Data Storage and How Does It Work?

6 min readApr 28


Nowadays, users are increasingly concerned about the privacy of their data. As a result, they are moving away from centralized storage providers and towards Web3 storage technologies to satisfy their requirements. There is no superior alternative to “Web3 Storage” for any user concerned about their files’ security. In addition, it also allows you to save and back up your files.

If you want to learn more about Web3 data storage, a detailed blog post is below.

What is Web3 data storage?

Web3 storage is a data-holding solution that makes use of blockchain technology. This is also known as decentralized storage.

A blockchain can be conceptualized as a digital chain of blocks, each storing data. This is the most straightforward approach to understanding how a blockchain works. The data stored on blockchains is protected by hashing, which ensures that the data cannot be modified. Data stored on a blockchain is also encrypted, making it significantly more difficult for hackers to access important information.

Data storage evolution: Web1 to Web3

Web 1.0

The earliest version of the World Wide Web (Web1) was primarily a static medium in which websites were introduced. This revolutionary development gave users a robust platform on which to enjoy media. The fundamental flaw was that it only allowed for one-way communication. In Web1, users could only view content without creating or contributing to it. As a result, web1 was an uninteresting place to work compared to the modern web. Web1 was similarly highly governed and regulated by its developers. They could also read and communicate with user data. Users were merely observers of web1 and had no control over the stuff they interacted with.

Web 2.0

Users can both browse and create content on Web2. They can also produce blogs, video tutorials, and other content. Users’ actions are restricted, though. Web2 enables its users to do more with their creativity, such as making their websites and connecting with data in new ways. They can now offer features and services that simply weren’t conceivable with web1. However, such data is stored and hosted on servers owned and managed by major technology corporations. The data users generate and upload to the internet is out of their hands. Therefore, information exchange and storage on the web are centrally located.

Web 3.0

Web 3.0 is decentralized, meaning no single entity is operating it all. The decentralized nature of Web3 ensures that users have unrestricted access to all their data while protecting their privacy. This user-focused web implementation is powered by blockchain networks, allowing decentralized data storage and processing instead of relying on a small number of central servers. Instead of using conventional methods, they communicate with users through dApps.

How does Web3 data storage work? Why is it important?

Crypto blocks store transaction data, enabling network members to examine a distributed ledger containing a particular cryptocurrency’s transaction history. Bitcoin, Dogecoin, Ethereum, and Tether are examples of cryptocurrencies that use blockchain technology. Because they do not depend on centralized authority or outside parties for their operation, these networks are sometimes called peer-to-peer or P2P networks. Its participants keep the network running, often known as miners or validators.

In Web3 storage, data is stored using a distributed model that employs blockchain technology in conjunction with this decentralized storage paradigm. User data is fragmented and spread over several nodes inside a Web3 storage network. Because of how the data is divided, it will be tough for hackers to obtain all of it. These pieces are encrypted, and duplicates are generated as a backup if something goes wrong.

Why do we need decentralized data storage?

Blockchain technology is used to develop the underlying infrastructure of web3. Because blockchains are not designed to store significant information, a blockchain needs to utilize decentralized storage. The consensus of a blockchain relies on quantities of transaction data being grouped in blocks and then rapidly distributed among nodes for validation. To begin, even though storing data in these blocks is possible, doing so comes at a very high cost.

Second, let’s imagine that these blocks are used to store massive amounts of utterly random information. In that scenario, there is a significant possibility that network congestion will significantly worsen, which will likely result in higher costs for consumers to access the network because of competitive bidding for gas. This is because of the implicit time-value block, which stipulates that users that need to submit transactions to the network at a specific time must pay higher petrol prices for those transactions to be prioritized. Because of this, it is strongly suggested that the NFT underlying metadata and the picture data for dApp front-ends be stored off-chain.

Thirdly, we need decentralized data storage because censorship and content modification are also possible on centralized networks. Data can be erased intentionally or accidentally due to policy shifts implemented by the storage provider, faults in hardware, or attacks launched by third parties.

How is Web3 decentralized storage different from cloud storage?

One of the major drawbacks is that many of the most popular storage platforms are run from a single location. This indicates that the information consumers entrust the provider with is centralized in a single place. Utilizing a single central site such as this can prove troublesome, mainly because it provides a single point of failure.

“single point of failure” refers to a vulnerability or problem that can bring down a whole network and system. However, outages, hacks, and other issues are significantly less likely to occur when the network is supported by hundreds or thousands of nodes instead of just a few.

No centralized organization can access the decryption keys for the data you store using a Web3 platform. Instead, the private encryption key used to decrypt your data is stored only on your device. You are the only one who has access to this key.

One more thing that makes Web3 storage platforms unique is their use of crypto.

Web3 data storage solutions

First, it is essential to note that “decentralized data storage” is another name for Web3 storage solutions. At this point, you are already familiar with what Web3 storage solutions are. You are also aware that adopting a decentralized strategy removes the possibility of a single point of failure and the problem of a centralized institution misusing or manipulating confidential data.

In light of this, people who hope for a better future unanimously agree that decentralized data storage solutions play an essential role. The good news is that a few projects are already concentrating on covering that issue. In addition, keep in mind that each one takes a different approach to guarantee redundancy, efficiency, and the appropriate amount of decentralization. It is reasonable to assume that development is still taking place, and the optimal method for storing Web3 data has yet to be developed.

In addition to the InterPlanetary File System (IPFS), which does not make use of blockchain technology, we have the following initiatives that are expanding the frontier of “Web3 storage”:

  • Holo (HOT)
  • Crust Network
  • Sia
  • Arweave (AR)
  • Storj
  • SONM

Benefits and limitations of Web3 data storage

On Web3 storage platforms, you can request files like on other storage platforms. On the other hand, rather than simply taking the complete file, the fragments are extracted from each node and then sent to you as a whole.

Because no single device in a decentralized storage network would ever hold the totality of a file, no one within the web can steal the file.

The users of many decentralized storage sites are given their private keys, which can then be used to access the data stored on those platforms. Without the private key, the data will continue to be inaccessible. This gives consumers complete control over their data rather than giving that control to a central body, which is consistent with the own idea of Web3.

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CoinEx is a cryptocurrency exchange founded in 2017 under the ViaBTC Group. The platform aims to simplify the trading of digital assets for its global user base, which currently spans more than 4 million users across 200+ countries and regions. CoinEx offers various trading services, including spot and margin trading, futures, AMM, financial services, swaps, strategic trading, and CoinEx Dock. It is known for its reliability, fast transaction processing, and ease of use. CoinEx is committed to expanding its offerings and providing its users with a comprehensive and stable service ecosystem.