Sia is a trustless, decentralized platform built with the intention of allowing users to maintain control of their data. Unlike traditional cloud storage providers, the Sia protocol is blind to what data is stored on it, and the design of Sia contracts mean that price and duration of your storage agreement cannot change once locked in. You don't risk losing your data because a company decides it's objectionable, or because of an increase in price halfway through the storage term.
To date, Sia is the only storage platform that is truly decentralized - there is no third party that has the ability to modify storage contracts or erase your data. All agreements are controlled between the renter, the host(s), the decentralized autonomous network, and the blockchain. Another benefit of Sia is that it's significantly cheaper than traditional cloud-based storage solutions, but with comparable uptime and fault tolerance characteristics.
Sia allows anyone with spare hard drive space to rent it out on the Sia network. Anybody anywhere in the world can add their storage to the Sia network, and get paid to do so. On the renter end, Sia is ultimately intended for enterprise use in a manner similar to that in which Amazon S3 is used today, but anybody can also rent space on the network. At scale, it could be an effective, geologically distributed Content Distribution Network (CDN), though the project is still in relatively early stages today.
A common misconception is that Sia is trying to be "another Dropbox", which is not accurate. Sia aims to be the back-end storage provider that other applications and services such as Dropbox would use. If Sia achieves it's goal of capturing a large share of the massive cloud storage market, most end users won't be aware of Sia any more than they are aware of services like Amazon S3 or Microsoft Azure being the foundation of the websites and applications they use.
The Sia network is comprised of the Sia client running on several computers. The client is available in a UI version, as well as via command line or API access. The client serves several functions: a wallet for Siacoins, and an interface for renters and hosts to buy and sell data and upload or download files. A renter is someone who is paying to rent storage; a host is someone with excess storage space who elects to rent it out on the Sia network. You can be a renter, a host, or both at the same time on the Sia network. You can also simply use the Sia client as a wallet if you don't want to rent or host.
The Sia client allows renters and hosts to interact with each other by creating storage contracts. Renters can specify how much money, in Siacoins, they wish to spend on storage; hosts can specify storage prices and a number of other values that affect their probability of being selected for a contract. More information on renting and hosting can be found in the Renting and Hosting sections of this site.
Another large component of the Sia network is the Sia blockchain and cryptocurrency (Siacoin), which is further discussed in Siacoins and Siafunds. The blockchain is responsible for managing storage contracts, as well as providing a means by which transactions between users can occur. The blockchain does not store renter data - if you rent storage space on Sia, it will be space on host computers. In regards to storing data, the blockchain is only used to manage the contracts and payments for the agreement of storing renter data on host machines.
When a renter creates a storage contract and begins to upload their data, Sia encrypts and breaks apart the data into pieces and distributes it to multiple hosts (currently 30). The data is broken apart with the use of an algorithm called Reed-Solomon codes, to a level of 3x redundancy. This means that only 10 pieces of the original 30 are needed in order to reconstruct the data. This allows up to 20 of the 30 hosts to go offline or lose the data, and the data will still be accessible. If your hosts are online 90% of the time, this results in over 99.99% overall uptime of data stored on the Sia network.
Since the data is encrypted and split into pieces, hosts have no way of accessing the data, or even being able to determine what type of data they're storing. The renter can feel secure in knowing that only they have access to their data, and the host is protected from liability for any data they store because it is impossible for the host to know anything about the data. Hosts are also incentiviced to stay online and retain data via a number of host scoring metrics.
Sia has planned other measures intended to protect renters, such as protection from a Sybil attack in the way of a mechanism called Proof of Burn. As described by David Vorick, Sia's lead developer:
A key part of Sia's approach to stopping Sybil attackers is proof-of-burn. Hosts burn coins by sending them to a provably unspendable address. Hosts are expected to burn a portion of their revenue (~4%) as a demonstration that they are real. Renters will select hosts that have burned coins with a probability that grows in a linear relationship to the total number of coins burned. Therefore, a host that has burned 2x as many coins will be twice as likely to be selected as another host that has all other factors the same. This provides a very important defence against Sybil attacks. An attacker that is trying to manipulate a renter will need to have all of the excess redundancy of a file before being able to commit an attack. For a file with 3x redundancy, that means the attacker will need to get at least 2.1x of that redundancy, which means that the attacker will need to burn enough coins to look like 67% of the network. That entails burning 1.5x as many coins as the rest of the network has burned combined. Especially as the network grows and matures, collecting that many coins is going to be prohibitive. (Source)