Data storage technology continues to shrink in size and grow in capacity, but scientists have just taken things to the next level - they've built a nanoscale hard drive using a single atom.

By magnetising an atom, cooling it with liquid helium, and storing it in an extreme vacuum, the team managed to store a single bit of data (either a 1 or a 0) in this incredibly miniscule space.

Not enough room for your holiday photos then, but according to the team from IBM Research in California, this proof-of-concept approach could eventually lead to drives the size of a credit card that could hold the entire iTunes or Spotify libraries, at about 30 million songs each.

"We conducted this research to understand what happens when you shrink technology down to the most fundamental extreme - the atomic scale," says one of the researchers, nanoscientist Christopher Lutz.

The team deployed its Nobel Prize-winning Scanning Tunneling Microscope (STM) for the experiment, which uses the 'tunnelling phenomenon' in quantum mechanics, where electrons can be pushed through barriers, to study electronics at the atomic scale.

With the extreme vacuum conditions inside the STM, free from air molecules and other types of contamination, scientists were able to successfully manipulate a holmium atom.

The microscope also applies liquid helium cooling, which is important in adding stability to the magnetic reading and writing process.

Thanks to that carefully controlled environment, the team could accurately read and write two magnetically charged atoms just a single nanometre apart – that's one millionth the width of a pinhead.

With the help of the microscope, the scientists could deliver an electric current that turns the magnetic orientation of a single atom up or down, mimicking the operation of a normal hard drive, but on a much smaller scale.

Today's hard drives use about 100,000 atoms to store a single bit, so you can get an idea of the difference we're talking about.

The team says the technique could produce drives that are 1,000 times denser than the ones we have right now.

And while the process is going to remain much too difficult and expensive to use commercially for some time, the researchers have shown that it can be done, which is an exciting first step.

This is just the latest in a long line of innovations in data storage - earlier this month researchers from Columbia University announced they'd crammed six digital files into a single speck of DNA.

While there have been previous efforts to store data on single atoms, this is now the smallest and most stable result yet, according to the IBM team.

"The high magnetic stability combined with electrical reading and writing shows that single-atom magnetic memory is indeed possible," the researchers conclude.

The study has been published in Nature.