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Blockchains require consensus among large numbers of people, so they can be slow. Additionally, a blockchain is not designed to hold a lot of data. This means using a blockchain for every bit of data a user might write and store is expensive. For example, imagine if an application were storing every tweet in the chain.
Blockstack addresses blockchain performance problems using a layered approach. At the base of the system is a blockchain and the Blockstack Naming System (BNS). The blockchain governs ownership of names (identities) in the system, names such as domain names, usernames, and application names.
Names in Blockstack correspond to routing data in the OSI stack. The routing data is stored in the Atlas Peer Network, the second layer. Every core node that joins the Blockstack Network is able to obtain an entire copy of this routing data. Blockstack uses the routing data to associate names (usernames, domains, and application names) with a particular storage location.
The final layer is the Gaia Storage System. A Gaia system consists of a hub service and storage resource on a cloud software provider such as Azure, DigitalOcean, Amazon EC2, and so forth. Typically the compute resource and the storage resource belong to same cloud vendor. Gaia currently has driver support for S3 and Azure Blob Storage, but the driver model allows for other backend support as well.
Because Gaia stores application and user data off the blockchain, a Blockstack DApp is typically more performant than DApps created on other blockchains. Moreover, users choose where their data lives, and Gaia enables applications to access that user data via a uniform API. When the user logs in, the authentication process gives the application the URL of a Gaia hub, which then writes to storage on behalf of that user.