Arweave is here

Arweave is not yet a household name. Even those who have heard of it usually only associate Arweave with the concept of "permanent data storage". This is correct, but there is more to it than that.

What is Arweave? Essentially, Arweave is a globally permanent hard disk. It is supported by a decentralized network and incentivized by tokens (AR) to provide permanent and sustainable storage for any type of file, with only a one-time prepayment.

The creation of Arweave is to solve the problem of long-term data storage. But it is not just a passive "data lake" with millions of permanent files stored in it. A huge infrastructure and software project ecosystem has created many applications that are impossible to achieve with non-permanent data using Arweave's protocol.

In this article, we will interpret the Arweave protocol and demonstrate its functions. This is a detailed read that will help you understand its entire contents, which we will break down into the following sections:

• Arweave 101 - Permanent Storage and Permaweb
• Technology: Blockweave and Access Proof (Spora)
• Economy: Incentive mechanisms for funds and support for permanent storage
• The first layer and the ecosystem built on top of permanent data

Arweave 101: Permanent Storage and Permaweb

Peter Thiel proposed the concept of "zero to one", which refers to an unprecedented invention. And permanent data storage is exactly that - something unprecedented.

Arweave offers two unprecedented features in today's internet:

• Permanent file storage - can save any type of file to the Arweave network (documents, MP3, PDF, movies, digital artworks, etc.). Through Arweave's innovative economic system (detailed later), a fund has been established to support decentralized network data storage for at least 200 years, and it is likely to be even longer.
• Permaweb - can permanently store web pages and applications, keep them running as they were originally designed, and permanently maintain indexing and searchability.

As Arweave said:

"The Permaweb looks like a regular web, but all of its content—from images to complete web apps—is permanent, quickly retrievable, and decentralized—forever. Just as the first web connected distant people, the Permaweb will connect people across vast lengths of time."

How does Arweave create permanent storage and Permaweb? Arweave achieves storage through two components:

• A technology component that turns blockchain into Blockweave
• An economic component that has created a donation fund that can cover future storage costs

Before following the economic components, let's first take a look at the technical aspects.

Technology: Arweave's Blockweave and Access Proofs (Spora 2.6)

Arweave's first major breakthrough is Blockweave, which is an iteration on blockchain technology. The traditional way of confirming data in blockchain is sequential: every piece of data in the database is added to a long chain and verified in order. This is how Bitcoin works - about 150 new 'block' data are added every day.

With Arweave's Blockweave, you only need to verify a random data fragment before adding new data. Therefore, the result is not a long chain of data, but rather a data weave or a three-dimensional spider web.

Due to the shortened verification process, the energy required to run Blockweave is greatly reduced. Blockweave is able to effectively store large amounts of data, while blockchain like Bitcoin cannot handle a data volume of 400 MB.

In the end, Blockweave maintains the immutability (unchangeability) of blockchain technology. All data placed in Blockweave will be retained within it. Once data enters Blockweave, it cannot be deleted. This does not mean that all information is publicly visible, but rather that information cannot be removed.

Like other blockchain technologies, the network continuously verifies data when uploading new data to confirm the existence and accuracy of all data.

“From now on, your data transactions will be verified more than 5670 times per day. In other words, the integrity of the data will be checked every 14.4 seconds. This is the highest level of data validation currently available.” ——Sam Williams, Founder of Arweave

The Arweave protocol is still being adjusted to optimize performance. The latest protocol updates include:

• Scalability of bundled transactions: Arweave allows up to 1000 transactions per block. These transactions don't need to represent a single file - they can be bundled packages containing multiple transactions or large datasets. Bundled packages can even nest other bundled packages, enabling Arweave to handle an unlimited amount of data.
• Miners are incentivized to replicate data with minimal energy consumption: Miners can now compete for rewards using standard desktop computer hardware. Arweave increases rewards for miners based on the amount of replicated data, rather than hash power and energy consumption.

To learn more about the history of the Arweave protocol and the changes that have increased its adoption, please watch the presentation by Forward Research: Now let's take a look at the economic innovation of Arweave.

Arweave Incentive Mechanism: Economics and AR Token

The basis of Arweave is a decentralized network that actually stores the added files.

Arweave's Blockweave only needs to verify a random data fragment before adding new data. Therefore, the result is not a long-chain data, but more like a data weave or a three-dimensional spider web.

Due to the shortened verification process, the energy required to run Blockweave is greatly reduced. Blockweave is able to effectively store large amounts of data, while blockchain like Bitcoin cannot handle a data volume of 400 MB.

What motivates long-term storage of your data in the network?

People around the world store data on Arweave because they get rewarded. Just like you wouldn't work for free, they don't store your data for free.

To store files for several centuries, a persistent economic incentive is needed.

How does Arweave solve this problem?

Introducing the Arweave Token (AR). Arweave has created an encryption token AR for paying to store data on the Blockweave network. Those who store permanent data will be rewarded with AR (which they can exchange for regular currency on digital exchanges).

But this economic system is more complex than that.

When you upload a file to the Arweave network, you need to pay a one-time fee. This fee is divided into two parts:

• As an initial storage fee paid in advance for 200 years
• The remaining part enters the fund to pay for future storage fees

The first question is: 200 years is a long time, is it expensive to prepay so much data storage fees?

It sounds expensive because we are used to prices rising in almost every area of life. But data storage is one of the few areas where prices are constantly falling. Over the past 50 years, the cost of data storage has decreased by an average of 30.5% per year.

The price will fluctuate slightly, but in reality, with 1 USD, you can permanently upload 400 photos or 3500 office documents to Arweave. You can check the latest price on the ArDrive price calculator.

The Decrease in Storage Costs

Arweave's working assumption is that storage costs will continue to decline over time. Given technological advances and increasing demand for data storage in society, this seems like a highly reasonable assumption.

So, in order to make the economically viable permanent storage, does Arweave assume that the cost of data storage will continue to decline by 30.5% per year?

No, absolutely not! In order to make economics feasible, Arweave assumes that the cost of data storage decreases by only 0.5% per year.

Again, it is emphasized that the initial cost of uploading data to the Arweave network covers a portion of the storage cost for the first 200 years. If the storage cost decreases by more than 0.5% per year, it will increase the duration of data storage.

Arweave Fund

If a portion of the one-time fee is used for the initial storage price, what is the remaining portion used for?

The payment system design of Arweave ensures that part of the cost of hosting data goes into a fund. This fund will pay for storage costs through generated interest.

It can be thought of as the university's fund. The university uses interest to pay for school expenses, such as sponsoring faculty positions, without touching the principal. Unlike traditional universities with constantly rising costs, Arweave uses interest to pay for rapidly declining storage costs. Even if the storage costs do not decrease, one-time storage fees and accumulated funds can still cover 200 years of storage costs.

As of January 2023, Arweave's fund has accumulated over 44,000 AR to ensure future data storage is adequately compensated. This fund is an incentive for the decentralized network to store data as an economic driver for decades to come.

To read more, please check out the 20-minute video on Arweave by Coin Bureau titled "Can data really be stored permanently?"

Arweave Ecosystem: First Layer and Multi-layer Environment

We have already discussed how Arweave provides permanent data storage. But the story is not over. The emergence of permanent data creates conditions for new software applications.

Arweave is a "first layer" blockchain - a foundational layer on which other technologies can be built. In other words, Arweave provides a foundational layer for permanent data, capable of verifying and completing transactions without the need for other networks, and with a powerful set of multi-layer infrastructure and applications on top of it.

Why is data storage so exciting?

Data storage is essentially boring. So why are Arweave users excited about it?

Storage itself may not be so interesting, but the issues it reveals - reliance on big tech, privacy concerns, hacker attacks, and unexpected data loss - are very relevant in the modern world. In addition, the emergence of permanent storage has created a 'permaweb pioneers' community that has developed software that was previously impossible to achieve.

A chart by SevenX Ventures breaks down Arweave into three components: usability, scalability, and organicity.

Practicality

People use Arweave to archive family photos and NFT collections. But its uses are expanding. In the future, Arweave will be used for:

• Atomic NFT that combines proof of ownership with the asset itself
• Smart Contract: Automatically execute computer code
• Robust infrastructure: data availability, decentralized gateway
• User applications: social media, file sharing applications, archives
• Public Data Records
• Business Solutions
• Property rights issues
• Immutable ownership records
• Developer Tools

Scalability

Arweave is a modular blockchain where the execution layer is separated from the consensus and data availability layers. In other words, Arweave is more like LEGO blocks that can be put together to build the application of developers' dreams. This allows developers to build:

• Scalable: Fast and large capacity
• Efficient: Low cost
• Decentralization: Established through consensus

The organic Arweave community is considered one of the most helpful and inspiring communities in the blockchain field.

Teams from different projects are collaborating to build a complete set of infrastructure and applications to leverage permanent data.

Arweave is also known as the "sleeping giant" in the encryption field because when people realize its functionality and what it has been doing, they will turn to permanent storage instead of temporary data storage. Tech giants including Meta have started uploading data to Permaweb. If this trend continues, Arweave is expected to become the backbone of Web3, the future of the Internet.

Arweave - The Backbone of Web3

The practicality, scalability, and organic nature of Arweave point to its direction as the backbone of Web3.

Looking at its ecosystem, you will find that Arweave is not just storage, it is a complete set of multi-layer infrastructure and application.

People, applications, organizations, and enterprises will be able to obtain secure and permanent data storage, and be able to use this data in many different ways.

The Arweave ecosystem includes multiple layers:

• Application Layer
• Tool Layer
• Decentralized CDN layer
• Off-chain computing and scaling layer
• Decentralized gateway layer
• Database Layer
• Smart Contract Layer
• Arweave protocol

Yes, Arweave is permanent storage. However, the foundation of permanent storage has grown into a multi-layered environment.

As the world gradually realizes the full potential of Arweave, seeing the novel creations brought by this ecosystem will be exciting.

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