I want to say that I'm really excited about EOS and the technology they will release in June. That being said this post discusses some the key aspects of storage and function of the network that I feel are being overlooked and unaddressed. Please feel free to set me straight wherever I have misunderstood or misinterpreted EOS and the platform in any way.
To start, If you would like to just read EOS's pdf regarding storage and future calculation price for storage on EOS's netowrk...heres the link. https://github.com/EOSIO/Documentation/blob/master/EOS.IO%20Storage.pdf
So here is my understanding and basic summary as well as questions I have:
How it works:
Files will be either stored on private servers using a IPFS format or block producers can be incenvtivised to store a given file via TOK token payment in the same format.
The IPFS format is standard that means a file and it's corresponding name can only exist once. That is, if a change is needed to be made to a file, then it's name would change as well.
This means that multiple request of the same file of a given name means the file will always be the same.
The price of storage in "TOK",the EOS token, will be the amount of used storage by users on the network's block producer's computers divided by unused storage on the same computers. EOS refers to this as Price = Balance/Supply x CRR. CRR is a predefined storage reserve so that storage never runs out. Users are always welcome to host their own files on centralized servers. However, if a server was down or a file erased then the file would be unavailable on the network. This could mean failure of contract or just unavailable content. Ultimately, the cost of storage and the cost of a critical failure due to files stored off network will be of utmost importance to some developers and DAPPs.
So what valuation will EOS really hold? I am not an expert...but it seems to me total market capitalization and issued coins are somewhat irrelevent. EOS's linked document above hints that block producers will be able to expand bandwidth and decrease bandwidth based on platform inflation and deflationary principles. I have not found anything that proposes rules to expanding bandwith and as such I get the feeling we may have a free market here. If I am one of the 20 block producers offering storage and bandwidth for tokens I may want to invest in increasing my storage capacity and dropping my prices to grab market share. What if all block producers only account for a total storage capacity of 1 Terabyte. 1 Terabyte divided by the 1 billion tokens times perceived value of network...how will storage cost compare to traditional networks and hosting? The value goes up if there's more demand for storage. What happens if block producers reduce storage and demand goes up? Is their a point that using the network would no longer be feasible for some?
Have we just created a DAPP monsters? How will this effect the realworld price of EOS?