This is the perfect time to be a tech startup, as many angel investors and venture capitalists are looking for innovative products and ideas that would propel technological impact to new heights. Over the last year, many startups have successfully raised seed capital and funding. The latest in this list is Storj labs that raised $3 million in funding from companies such as Google Ventures, Qualcomm Ventures and Techstars.

Storj (pronounced “storage”) is a distributed cloud-service provider that has created a decentralized peer-to-peer solution. This service works by organizing users who are willing to rent out their spare hard drive space and bandwidth to customers who are looking for the same. All these users are connected through a peer network.

In the past, one of the biggest challenges of having a peer-to-peer cloud sharing technology was security. How can users know that their private data will not be accessed by other users in the same network? In fact, this concern was one of the reasons why this idea never took off in the first place.

Storj claims that it has found a secure solution for this problem. Their system enables users to store their unused space in a secure and decentralized location using block chain features such as a transaction ledger, public or private key encryption and cryptographic hash functions. In this sense, Storj  has brought block chain technology back to the world to ensure that files are safe and not accessed by unauthorized users.

So, what’s the advantage of choosing Storj over the leading providers like AWS and Microsoft?

Cost. AWS and Microsoft need large datacenters to store the data, not to mention the high cost of physical space and electricity needed to power it. This cost is passed on to developers and users. In addition, there is always a possibility for physical servers and networks to have problems, and this can lead to data failure or loss.

In stark contrast, the services offered by Storj is cost-effective because the money goes towards users who are renting out their space. Since they don’t need physical space or electricity, the cost per unit of consumption is low. Besides being cost-effective, users are in control over their device and data because of the decentralized model.

There are no central servers that can be compromised, so data is safe. In addition, the Storj system uses client-side encryption, which means, only the end users have access to their keys needed to decrypt files. This way, security is Storj’s biggest selling point.

Such a unique model has seen good response from both users and customers. Currently, Storj has about 7,500 users who rent out their hard drive space, and about 15,000 API users worldwide who use them.

Storj has also entered into an agreement with Heroku, a cloud-based platform-as-a-service (PaaS). This partnership helps developers to build and run their applications completely in the cloud, as Storj offers them a distributed object storage solution complete with advanced features such as encryption.

Little wonder then that Storj Labs has raised a funding of $3 million. It could be the first of many more to come.

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