Siacoin Investment: A Guide To Getting Started

Siacoin is the token of Sia, a decentralised storage provider that has seen a huge increase in value. This has led many new investors to consider investing in Siacoin. However, some sources advise against investing in Siacoin, citing the existence of a secondary coin offered by Sia called Siafund, which will reward holders if Sia explodes into the mainstream. If you are considering investing in Siacoin, it is important to do your research and understand the risks involved. Some people choose to invest a small amount of money in Siacoin as a long-term investment, while others choose to invest in other cryptocurrencies such as Bitcoin or Ethereum. It is always a good idea to consult with a financial advisor before making any investment decisions.

Siacoin vs Siafund

Siacoin is the native token of the Sia blockchain network, and is central to the function of the Sia crypto network. Siacoin is a cryptocurrency that was never pre-mined and is only entering circulation as a result of mining. It is a cryptocurrency specifically designed for this kind of service. Its blockchain supports storage contracts so you can form these with the selected hosts directly.

There is a secondary coin offered by Sia called Siafund. Siafund is a supplementary token of the Sia network with only 10,000 SF that will ever be in existence. Unlike Siacoins, which can be divided up, a single SF cannot be split. They are only transferred or held in whole units.

Siafund holders will earn a percentage of all Siacoin spent in the Sia ecosystem. When a customer buys storage using Siacoin, 3.9% of that transaction will go to Siafund holders. If a customer spends 100 Siacoin for a storage contract, 3.9 Siacoin will be divided among the 10,000 Siafund holders. This means that if you hold 1 Siafund, you would gain 0.00039 Siacoin from this transaction.

Siafunds can be held in the same wallet as Siacoin, but will never be seen in the UI unless you have one. These tokens are securities, and you can read more about the landmark 2019 SEC settlement that declared them so. They are used for revenue sharing on the Sia network. The Sia core team currently holds approximately 85% of all Siafunds while the rest were distributed to the community in a total of three offerings over the last five years. This distribution trend is expected to continue.

Long-term investment

Siacoin is a cryptocurrency made for the actively developed cloud-based storage platform referred to as Sia. Users contribute disk storage from their PCs to create a decentralised network. This cryptocurrency is designed to facilitate decentralised payments for the platform.

The distributed nature of Sia's cloud-based platform allows for numerous optimisations in terms of latency, dependability, security, and throughput. Sia's decentralised aspects allow anyone with storage to get paid, reducing the total cost of cloud storage and increasing interest in the platform.

As a long-term investment, Siacoin has the potential to be lucrative. In a Reddit AMA, one of the founders and developers of Sia was asked where he saw the company in three years. He responded that realistically, Sia would be used almost ubiquitously among privacy-focused communities, and that the first major names, such as Netflix, would be migrating their content distribution to Sia. He added that speeds would be regarded as unbeatable, and anyone using Sia would have access to their data from any machine by using just a master password.

This answer is telling of Sia's ambition and potential future rise in the market. If a development as large as a partnership with a company like Netflix occurs, the price of Siacoin, along with the lucrativeness of the Sia platform, would likely surge.

However, it is important to note that a development such as a partnership with Netflix is still months, if not years, away. Therefore, if you decide to invest in Siacoin, you would need to hold on to it for a long time.

The price of Siacoin has fluctuated since its launch in 2015. It started at $0.000042 at the end of August 2015 and remained stable throughout the year, continuing this trend for two years. In April 2017, the price changed to $0.0009, then rose to $0.0188 at the end of June 2017, and then plunged to $0.007 at the beginning of November 2017. Siacoin ended 2017 at a price of $0.0296.

In 2018, Siacoin hit $0.1117 to record its new all-time high. The price then started to vary, sinking to $0.0097 in mid-March and recovering to $0.0283 by early May when it got listed on the crypto exchange platform Binance. At the end of 2018, Siacoin was trading at $0.0027.

Siacoin started 2019 at a price of $0.0027 and remained stable with certain variations throughout the year, ending 2019 at $0.0013.

In 2020, Siacoin started with a bearish trend, with the price at $0.0013 at the start of January, reaching $0.002 by the end of February, and then declining to $0.001 by mid-March due to the Covid-19 outbreak. Siacoin attained its resistance level by reaching $0.004 by early September, but the price started to fall again, trading between $0.002 and $0.003 until the end of November. By the end of 2020, Siacoin traded at $0.003.

In January 2021, with certain improvements, Siacoin traded at the price of $0.005. In March, the asset managed to generate a two-year high at $0.06292. However, the bulls failed to carry the price action for the long term, and the asset plummeted to $0.01065 due to the May market crash.

As of January 2024, Siacoin is available for trade across exchanges such as Binance, Kraken, Huobi, and Upbit, among others. According to CoinPedia's Siacoin price prediction, the price of the digital asset might soar as high as $0.05135 by the end of 2024. On the downside, factors like negative criticism and liquidations might bring the price down to $0.00645.

While it is difficult to say whether Siacoin is a good investment, it has a clear use case, a working product, and is priced to compete with more established services covering the same niche. However, it is up against a lot of different services that already offer or are hoping to offer the same functionality, including some of the largest companies in the world.

Therefore, if you are considering investing in Siacoin for the long term, it is important to do your research and understand the risks involved. As with any cryptocurrency investment, Siacoin is a high-risk, high-reward investment, so make sure you only invest what you can afford to lose.

Short-term investment

Siacoin is a decentralised cloud storage service that allows users to rent out space on their hard drives. It is a form of digital cryptocurrency, also referred to as SC Coin.

If you are looking for a short-term investment option, Siacoin may not be the best choice. Here are some things to consider before investing in Siacoin for the short term:

• Competition: Siacoin has a lot of competition, including both traditional companies and blockchain companies working on better cloud storage solutions. This makes it less likely that Siacoin will succeed in the long run.
• Regulatory issues: With storage, there could be regulatory issues as helping someone store illicit material is already against the law. This could create problems for the project in the future.
• Technological issues: There is a possibility that the project's team may not be able to deliver on their goals. This could affect the viability of Siacoin as an investment.
• Price volatility: The price of Siacoin has been highly volatile and subject to significant fluctuations. While there have been periods of growth, there have also been sharp declines. This makes it a risky investment, especially for the short term.
• Expert predictions: Some experts have predicted that Siacoin may not perform well in the short term. For example, Palwasha Saaim, B.Sc. predicts that a $1 Siacoin is possible but acknowledges the strong competition from other companies. Other predictions, such as those from CoinLiker, are extremely optimistic but lack any fundamental analysis or explanation of their figures.
• Technical analysis: Technical analysis of Siacoin's price trends suggests that it may not be a good short-term investment. The charts indicate that the outlook for Siacoin can change rapidly, and it may be difficult to predict its performance over a short period of time.

While Siacoin has a clear use case and a working product, it faces strong competition from well-established companies. Therefore, it may be risky to invest in Siacoin for the short term. It is important to do your own research and carefully consider your investment goals and risk tolerance before making any investment decisions.

Siacoin's scalability

Siacoin is the native utility token of Sia, a blockchain-based distributed, decentralized cloud storage platform. It is a secure, trustless marketplace for cloud storage in which users can lease access to their unused storage space. Siacoin serves as the medium of exchange for paying for storage on the network.

Sia incorporates a peer-to-peer network with blockchain technology. Users download and confirm the whole blockchain before they can begin uploading. After verifying, users configure a rental agreement that bears hosts on the network. The Sia system has a thoughtful method of offsetting accounts by employing smart contacts, and it is also how it has worked to crush the scalability problems that are impacting other blockchains. Rather than constructing a fresh transaction every time a host is disbursed, an accumulative contract is formed between the host and the user.

As the files are distributed among various nodes, no one node can use them. Even if they obtained the private key of any renter, all they would hold is a trace of the file saved. This shows that Sia can deliver an invariably increased uptime like the Bitcoin blockchain while also assuring users don’t have to entrust each other to keep files and utilize the network.

Renters are also secured from the potentially vulnerable hosts by demanding proof of storage. This forces hosts to verify and demonstrate that they are online and correctly maintaining the renter’s data.

Sia's decentralized nature allows it to offer competitive storage rates. Files stored on the Sia network are divided into 30 encrypted segments, with each segment uploaded to a unique host for redundancy. The agreements between uploaders and hosts are recorded on Sia's blockchain and enforced using smart contracts.

The total supply of Siacoin is unbounded, meaning there is no hard limit on how many Siacoins can be in circulation. This protocol was established to allow the Sia platform to scale to millions of users and ensure it could always be used. To help keep the supply in check, Siacoin’s developers introduced a token burn feature – a mechanism for permanently removing tokens from circulation. According to the official website, “sellers of storage on the network will burn coins to prove that they are real and have good intentions towards the network.”.

Siacoin's competitors

Sia distinguishes itself from its competitors in several ways:

• Decentralization: Sia does not force users to trust anyone. It provides a trustless environment where everything is working, and no one can stab you in the back.
• Host Quality: Sia hosts have to put forward money that promises they will keep the data, reducing the number of flaky hosts.
• Marketplace-based: Sia is marketplace-based, giving renters full control over which hosts they use. Hosts are picked per machine, allowing users to focus on hosts in specific regions or with specific cost structures.
• Security: Sia is highly focused on security, with bitcoin core devs reviewing its architecture and bitcoin cryptographers reading its signature code.

While Siacoin has its unique advantages, it is essential to research and understand the risks and potential of any investment opportunity before making a decision.

Frequently asked questions