Does Blockstack Gaia actually use the Blockchain for storage? Or is Blockstack only really using Blockstack technology for the authentication part? Is there any data stored in the Blockchain?
As far as my understanding, your identify based data are stored in Blockchain. The other data that you push through dApps are encrypted and can be stored in any cloud storage (user choice). You can read through https://github.com/orgs/blockstack/projects/27
Blockstack helps in achieving this.