Additionally, downloads will cost siacoins. Even if the storage contract has not expired yet, the hosts will be making money by serving downloads.
What do you mean by downloads will cost siacoins.
Hosts will have the ability to set a price on downloads. Bandwidth tends to be more expensive than storage. On Amazon, downloading 1TB is the same price as storing it for 3 months. Hosts are free to set whatever cost for bandwidth they like, but setting a high price will cut into profits. Because you are storing on 200 hosts, and you only need to talk to some of them, you can prioritize the hosts that have lower bandwidth costs. Anybody will ransom-prices can be ignored. Holding data ransom is bad for profitability, because nobody will ever use you.
The higher your redundancy, the greater your ability/flexibility to prioritize hosts with fast, low cost downloads. Furthermore, when uploading in the first place you are able to choose a set of hosts that you are comfortable with and know generally have best prices. So out of the best hosts, you still only need a fraction to not try to extort you in order for extortion by the rest to be completely harmless.
This makes attempted extortion harmful to the extorter. If they have bandwidth that's not in use, instead of making a little bit of money from helping you with your download, they are making no money at all because you are using someone else instead.
Ultimately, I think bandwidth on Sia will be much cheaper than on any traditional service. There will be lots of ways to apply price pressure to hosts, compared to traditional services where there is a monopoly on your data and ransom-prices must be paid.
I think need add a cureit mining difficulty in wallet.
There's a block estimator, that's going to have to be good enough for the next few weeks. We're busy writing as many tests as possible before launch. Hopefully by July we can have a miner that's a lot nicer. (GPU miner should be ready by June 7th, but I'm not sure how nice it's going to be).
Thanks for the explanation. One thing I'd like to know is how would I buy Sia coins after launch? Will there be an official exchange?
For the first few weeks at least you'll have to do everything OTC. #siatalk on freenode is an appropriate place for this, we can also create a channel for it on the slack. Hopefully we can get on a traditional exchange (both siacoins and siafunds), and hopefully we can also set up trustless btc<->siacoin exchanges using hub+spoke micropayments (we'd run the first hub, but open source it so anyone could run a hub). The timeline for this is hopefully within 1-2 months of launch.