We introduce NileStore, a replica placement algorithm based on an economical model for use in Peer-assisted cloud storage. The algorithm uses storage and bandwidth resources of peers to offload the cloud provider’s resources. We formulate the placement problem as a linear task assignment problem where the aim is to minimize time needed for file replicas to reach a certain desired threshold. Using simulation, We reduce the probability of a file being served from the provider’s servers by more than 97.5% under realistic network conditions.