Sia uses a custom, proof-of-work blockchain designed specifically for facilitating payments and file contracts.
There are a few important reasons for having our own cryptocurrency and our own blockchain:
- It gives us control over our own destiny. The last thing we want is to run an enterprise-grade storage network on a technology that we do not control. If Bitcoin or Ethereum have network congestion, or if Ethereum forks off, or if some new vulnerability is discovered, we don't want to be affected, or subjugated to another party's roadmap.
- It helps align incentives across our decentralized network. Miners get rewarded in Siacoin for securing the blockchain, hosts receive Siacoin for selling storage space, renters pay in Siacoin to buy storage space.
- It allows us to create smart contracts built specifically for file storage. A Siacoin can do 2 things - it can be transferred from one user to another, or put into a file storage contract on the network.
Maybe if we were starting Sia in 10 years, when Ethereum or another tech was mature and stable and very secure, we could have built Sia on top of it. But for now, our own crypto and our own blockchain is required. We are not trying to build something that may work in 10 years - we have already built a working decentralized storage network that is secured by Proof of Work.