Space Monkey has announced a new hosted cloud storage service that puts the cloud in your house. The company says the new product is a hybrid of Dropbox, Pogoplug and BitTorrent and will be available for considerably less money than existing cloud storage services whilst also offering a greater storage capacity.

The device itself is built around a two terabyte hard disk which offers you half of the total capacity for personal storage. It differs from other cloud storage solutions however, in that the remainder of the hard disk space is utilized for storing small chunks of the data of the service's other users.

One immediate advantage this offers is the storage capacity. 1TB for $10 per month is a considerably better deal than the competition's more traditional cloud-based solutions, like Dropbox that currently charges users $19.99 a month for 100GB.

A concern that immediately come to mind is security. Space Monkey says the new device uses a combination of AES-128 and RSA-4096 encryption to secure all of the partial chunks of data on each unit, all communications are fully encrypted at all times, and only partial chunks of data are stored on other user's products.

"When the device is plugged into the home network or small office, it gives the user a local cache for fast uploads and downloads. In the background, the device quietly makes a privately encrypted copy of your data, breaks that encrypted file into many little pieces and then distributes them out to the Space Monkey storage network for safe keeping," Space Monkey said when announcing their new product.

Access from a browser or a mobile app away from home will grab the required data from the nearest located Space Monkey drives rather than your home network, which should also make retrieving files faster. Since your cloud data is also stored locally, it will work in the event of an internet connection failure as well.

Space Monkey says the service will launch in the next few months and those interested can sign up for more details at the company’s website.  The box is included as a lease in the monthly premium, but for those that would like to own it outright you can jump the queue and preorder it $240 with two years service included in the purchase price.