Arweave (AR) is an innovative blockchain offering a decentralized perpetual storage solution. Unique in its category, it is now one of the pillars of Web3. Let’s discover together the operation of its particular protocol, the Blockweave, as well as that of its overlay of perpetual decentralized applications, the Permaweb.
What is Arweave (AR)?
Launched in June 2018, Arweave is a blockchain offering a new type of perpetual storage thanks to an ingenious means of endowment. This allows developers and users to store files forever, for the very first time in history. Think of Arweave as a collective hard drive that never forgets where everyone can write.
Like a modern Alexandrian library, Arweave is a location where all documents could be stored for eternity. With one exception, the use of blockchain allows his product to be far more resilient than any physical equivalent.
The Arweave protocol makes it possible to connect people with storage space with others by searching. This method of operation is similar to that of Uber, where people in car possession are matched with other people looking for a ride.
Unlike protocols like Filecoin, Arweave’s value proposition lies in its ability to offer permanent storage by allowing the user to pay only once while maintaining the sustainability of the protocol over the long term.
The Arweave Ecosystem
The Arweave protocol comes in the form of a two-layer architecture. The first, the blockchain, also called the Blockweave, concentrates the consensus and the history of transactions and files. The second, the Permaweb, looks like a decentralized and perpetual Web on which we find many applications.
Figure 1: Architecture of the Arweave protocol
Blockweave and Proof of Access
Unlike other more classic blockchains, Blockweave’s architecture is quite special. Indeed, in a classic blockchain, any block is linked to the next and the previous one by its Merkle root. In other words, when a validator creates a new block, it must prove that it has access to the information of the one before it (and so on).
In the case of the Blockweave, the new block also depends on another randomly chosen one from the network’s history. This is called the recall block.
In a blockchain like Ethereum or Bitcoin, blocks contain very little information. It contains data on the state of the blockchain and all the transactions that must be included. In the case of Arweave, these blocks also contain the files intended to be stored there perpetually.
One can visualize the storage of this content by a hard disk on which all the files are kept in folders whose name corresponds to the date on which they were included on the disk.
Arweave also stands out in its choice of consensus method. Where most blockchains opt for Proofs of Work or Proofs of Stake, Arweave has moved towards Succinct Proofs of Random Access, or SPoRA. This choice is a direct consequence of Blockweave’s architecture.
Indeed, when a validator is chosen to create a block, he must prove that he has access to a random block in addition to the previous one. If this is not the case, it will be temporarily discarded, and another will be selected in its place. This consensus method encourages each validator to keep as many files as possible. In the most extreme case of the node having all the history and all the files since the conception of the blockchain, it will never be discarded and will be paid as soon as it is selected to validate a block.
Thus, there are several factors to quantify the chances that a node validates a block:
- The hashing power of the machine, like blockchains like Bitcoin or Ethereum;
- The speed of the Internet connection, common to the vast majority of blockchains, ensuring the speed of uploads and downloads;
- Storage capacity, because the more data the node stores, the more likely it is to have access to the randomized block required by the Blockweave.
The Permaweb, a Decentralized Perpetual Web
In order to allow simple access to the Blockweave, a second layer has been developed, the Permaweb. It allows simplified and quick access to data stored on Arweave.
The Permaweb is actually a decentralized and permanent version of the classic Web that we use every day. This is where all Arweave-related applications are hosted.
For an application to be deployed on Permaweb, it must use SmartWeave, a smart contract protocol native to Arweave. Unlike traditional systems (like Ethereum), SmartWeave leaves the calculation phase to the users of the applications. This results in increased scalability and decentralization.
Thanks to its compatibility with HTTP, it is possible to access all Permaweb applications via the Web, search engines and traditional browsers.
To sum up, the Permaweb looks like the traditional web, except that everything published on it is available forever. On the side of content creators, the Permaweb offers permanent, low-cost and maintenance-free hosting for their applications and web pages.
On the Permaweb, there are more than 400 applications indexed on the ArweaveApps site. Among the best known and used, we can distinguish:
- ArDrive: a perpetual equivalent to Google Drive on the Arweave blockchain;
- Mirror: an equivalent to Medium using the Arweave and Ethereum blockchains.
Figure 2: Arweave’s ecosystem in January 2022
Moderate Permaweb Content
There is, however, one glaring problem that comes with storing files forever: moderation. Indeed, what if a compromising or illegal document were to be posted on the Arweave blockchain?
To solve this problem, several initiatives have been put in place:
- Network validators are allowed to choose whether or not they want to store the files contained in a block. And this is for personal, legislative or other reasons. Several tools such as algorithms are made available to them to filter the data they would like not to store;
- Applications and portals can also choose whether or not to display certain files according to their rules, usage policies or values.
A partnership with the Internet Watch Foundation (IWF) concluded in 2019 also gives it the right to monitor the content of Permaweb. The latter can then impose certain rules on the actors of the network in order to reduce the content that it deems undesirable.
The Cost of Storage on Arweave
The biggest difference between Arweave and its competitors like Filecoin or Storj lies in the nature of the storage. This is because every file stored there is forever. The biggest implication of such a choice is payment for storage. This must be done once when the file is sent there for the first time since the traditional subscription model cannot be applied in perpetuity.
To get the price of storage, Arweave uses a model based on HDD economics. To do this, the protocol assumes a storage duration of 200 years, for which storage fees must be paid. Watching everything get more expensive around us, paying for 200 years of storage seems like a huge amount. However, the price per gigabyte of storage is one of the few things to trend in the opposite direction.
Since the inception of hard drives, the price per gigabyte of storage has fallen by approximately 30% per year. Thus, the price is determined using an ultra-conservative estimate of 0.5% per year (or 60 times less). Thanks to this model, if the price of storage drops by more than 0.5%, then the duration of storage will only be increased (this scenario being more than likely). For example, if the price per gigabyte decreases by 2% per year on average, then files could be stored profitably for 300 years.
Nevertheless, the cost model described so far represents only a small part of what is paid by the user. Indeed, the majority of the money is paid into an endowment fund. This money is kept as long as it is profitable for validators to store files. In the event that this is no longer the case, this cash will be used to make up the difference. This fund gains value each year as the price of a gigabyte of data decreases.
Figure 3: Purchasing power of Arweave’s endowment fund
This pricing method allows the cost of storage to be decorrelated to the price of the AR token. As of this writing, 1 gigabyte of storage costs the equivalent of $2.5 on Arweave. This high entry price guarantees the quality of the stored data as well as the efficiency of the Arweave network.
What are the Roles of the AR token?
The AR token, native to the Arweave blockchain, has 2 main use cases:
- Pay transaction fees. As on the vast majority of blockchains, carrying out a transaction (regardless of its type) requires paying fees. They are very low on the Arweave blockchain, in particular thanks to its speed, 5,000 transactions per second.
- Pay for storage. Each time a user wishes to store files on Arweave, he must pay. This payment is unique and must be made in AR.
Thus, the use of any Permaweb application requires only one token and no other: the AR.
Fundraising and Tokenomics of Arweave
During its development, Arweave has raised numerous funds from a large number of institutional and individual investors. In total, Arweave is estimated to have sold nearly 26% of its tokens for a total of $22 million, split across 3 sales:
- 8.9 million AR sold for $8.7 million in June 2018 during a private ICO made up of more than 30,000 retail investors;
- 2.5 million tokens sold for $0.72 per unit during a public ICO in 2018;
- 5.9 million AR sold at $0.56 each in 2019 and 2020 in two private sales to funds like a16z, Coinbase Ventures or Multicoin Capital.
In total, there are only 66 million ARs, of which 55 million were created when the blockchain was launched. The remaining 11 million is reserved to reward network miners.
Figure 4: Distribution of AR tokens
Arweave Team and Partners
The Team Behind Arweave
Arweave was founded in 2017 as Archain by two British computer engineers, William Jones and Sam Williams. While in the process of completing their doctorate in computer science at the University of Kent, the two colleagues abandoned their doctorate and created Minimum Spanning Technologies, the company in charge of developing Arweave.
William left the ship in 2018, leaving the captain’s helm to Sam. The most influential individuals in Arweave and its ecosystem are:
- Sam Williams: co-founder and CEO of Arweave and Minimum Spanning Technologies;
- Sebastian Campos Groth: Chief Operating Officer of Arweave.
Find details of the Arweave team and its contributors on their official LinkedIn.
Thanks to its great utility and uniqueness in the blockchain world, Arweave has partnered with many protocols.
Among these is the Solana blockchain, with which Arweave has built a decentralized permanent storage portal, SOLAR. This makes it possible to store all the history of this heavy blockchain in order to reduce the constraints on entry for the validators of the network.
Gitcoin and Arweave have joined forces to launch several funds called the “Open Web Incubator”. These allow new talents to create innovative applications around the Web3. A first fund of $100 million is opened in June 2020 to inaugurate the collaboration.
Mirror, the famous blogging website (similar to Medium), uses Arweave to store all of its data. This includes all articles and images, but also the edit history.
How to Buy AR Tokens?
Explanations for Buying AR on Binance
- Register on Binance;
- You will receive an email and need to click on a link to verify your account;
- Deposit funds on the platform;
- Click on the Market menu and look for the pair AR/USDT;
- All you have to do is buy AR for the amount of your choice;
- Congratulations, you are now in possession of AR tokens.
Our Opinion on Arweave and its AR Token
Arweave presents itself as a perpetual storage solution. However, the breadth of possible uses made it a perfect candidate for building a decentralized Internet.
At the time of writing, Arweave is the second most valued decentralized storage solution with a capitalization of nearly $450 million. It only takes seconds for Filecoin and its billion-dollar capitalization.
In terms of total storage capacity, Arweave has experienced a meteoric rise since its creation in 2018. In June 2022, Arweave reached 77.5 terabytes of stored data.
On the other hand, Filecoin can at the same time store more than one million terabytes. However, this last figure should be qualified, given that the vast majority of this space is not occupied.
Figure 5: Evolution of Arweave’s storage capacity
Although the cost of storage on Arweave is not correlated to the AR token, it is still very much linked to its blockchain. Indeed, AR is the only native cryptocurrency of Arweave and is necessary for any purchase of storage space. Since 2020, the price of AR has been strongly correlated with that of SOL. This is mainly due to the creation of the SOLAR portal between Solana and Arweave during the same year.
The question of potential content censorship, however, is worth asking. Indeed, the partnership with the IWF comes as a constraint for Arweave, which is obliged to collaborate with the authorities to fight against certain scourges such as misinformation or harassment.
This collaboration could thus become the door open to any future censorship and thus very largely compromise the real decentralization of the Arweave network.
Despite the strong competition with Filecoin or Storj, it seems that Arweave has, at the time of writing these lines, no direct competitor in the development of perpetual storage solutions. Added to this is its use, which is only progressing with the arrival of many popular applications such as Mirror.
Although the arrival of competitors or ethical issues related to permanent storage could develop in the coming months, the future looks bright for Arweave.