What Is Arweave (AR)?

Arweave is a decentralized storage-as-a-service platform that allows users to store data permanently in an immutable and censorship-resistant environment at an affordable one-time fee. It connects users who wish to provide disk space with people who want permanent data storage, and the entire process is incentivized with the AR token.

Here's a quick rundown of some facts to understand what Arweave is all about.

• Arweave is created using a blockchain-like infrastructure called blockweave. As it is built on top of the traditional HTTP protocol (the foundation of the internet) you can easily access data stored on the Arweave network via commonly used web browsers.  

• Arweave supports all data formats like wikis, PDFs, videos, web applications, etc.

• The Arweave network also hosts permaweb, a decentralized and permanent web that stores data and hosts decentralized applications. 

• Arweave storage is natively available on major blockchain networks like Avalanche, Arbitrum, and Polygon. Solana stores all its ledger data on Arweave's permaweb. Moreover, anyone can permanently store and even mint their NFTs on Arweave.  

• With more than 1,000 nodes, Arweave has 157 million files stored on its network as of March 2022. Roughly 1.5 million files are added to Arweave each day. 

How Does Arweave Work?

To completely grasp what is Arweave and how it works, we need to dive deep into Arweave's infrastructure - 

Blockweave

Blockweave is a blockchain-like storage system where the network is divided into decentralized blocks of data. Each Arweave block is linked to two blocks – a preceding block and a random block from the block weave called 'recall block'. 

Unlike traditional blockchains, Arweave doesn't require nodes to store and sync the entire blockchain to participate in the network. The node can simply download the latest block and join the Arweave network. This is made possible because Arweave blocks contain a list of hashes of all previous blocks and a list of all active wallets, enabling nodes to verify transactions without downloading the entire blockchain. 

Succinct Random Proof of Access

Until February 2021, Arweave used a hybrid Proof of Work (PoW) consensus mechanism called Proof of Access (PoA) to verify transactions on Arweave. Here's how Arweave works with PoA – To mine new blocks on Arweave, miners need to provide cryptographic proof showing they have access to blockweave's recall block.

Succinct Proof of Random Access or SPoRA in short improves upon Arweave's PoA consensus protocol. SPoRA is energy efficient and disincentivizes resource pooling, encouraging miners to maintain their own node, creating a more decentralized network. 

Wildfire

Wildfire is a ranking algorithm that ranks nodes based on how quickly they respond to data requests on the network. Since nodes are incentivized based on how fast they share data with their peers, Arweave can facilitate costless access to data in their network. 

Blockshadows

Blockshadow is an efficient way to transmit information that enables Arweave to reach consensus at near network speed and process transactions faster without spikes in gas fees when network usage increases. Blockshadowing involves removing transactions from the blocks and sending only a minimal block data (shadow) that allows nodes to validate blocks and reach consensus without receiving the full block. This process helps Arweave to achieve a transaction throughput of around 5,000 transactions per second. 

About AR token

Once you buy AR tokens on exchanges like OKX, you can use them to pay for storing and retrieving data on Arweave as well as interact with applications on Permaweb. 

One thing about AR that separates it from other crypto incentives is its distribution. The fees submitted to the Arweave network are not directly paid to nodes that provide data storage services on Arweave. Instead, it is pooled to accrue returns that would compensate the nodes over a number of years. Such storage endowment is the reason why you get to store data on Arweave for a one-time upfront payment. 

About Arweave - How It Started?

Arweave was founded in 2017 by Sam Williams and William Jones. Sam and William met at the University of Kent while they were pursuing PhD in distributed computer systems and networks.

Sam Williams realized that one of the core reasons behind fake news is lack of tools to verify the news and sources. In an attempt to solve data manipulation, Sam took the idea of creating a decentralized permanent storage network to William and the duo dropped out of college and founded a company called Minimum Spanning Technologies Ltd. to create Archain (now Arweave). 

Archain was rebranded to Arweave in February 2018 and the Arweave mainnet went live in  June 2018. After the mainnet launch, William left the project and went on to complete his PhD. The Arweave team continued developing the project and released Permaweb in January 2019. In 2020, ARCA DAO was launched with an initial donation of $25,000 in DAI stablecoin from the core Arweave team to decentralize the development of the Arweave ecosystem.   

Deep Dive About AR Tokenomics 

Speaking about AR supply, Arweave has a maximum hard-capped supply of 66 million AR tokens. Out of these, 55 million AR tokens were minted upon the creation of blockweave's genesis block in June 2018. The remaining 11 million AR units will be gradually released into circulation as block rewards. 

In Arweave's pre-sale event held in August 2017, the project sold 10.8% of the initial minted tokens. Whereas, Arweave sold 7.1% and 1.1% AR tokens during the public sale in May 2018 and June 2018, respectively. 

Additionally, 19.5% of the supply was allocated for a private sale, 2.9% for project advisors, and 19.1% for ecosystem development. From the remaining supply, the Arweave team got 13% AR tokens and 26.5% were kept aside for future use. 

How Is AR Minned?

New AR tokens are released into circulation via AR mining rewards. Miners add new blocks to the AR network and are incentivized with AR tokens for their contribution. The requirement to have access to a random recall block to produce a new block encourages miners to store more and more data. 

As mentioned earlier, unlike other blockchains, you don't need to download the entire blockweave network to start mining on Arweave. Currently, you can mine AR tokens using a Linux client having a minimum of 8 GB RAM. If you wish to become a miner on the Arweave network and earn AR tokens read this detailed AR mining guide.

How Does Arweave Stand Out From Its Competitors?

Unique Proposition 

Be it Filecoin, Storj, or Sia -- all these decentralized storage solutions offer contract-based storage. This implies a user can store an amount of data for an agreed period. However, Arweave offers a unique proposition – permanent storage – that allows users to store data forever for a one-time fee. 

The contract-based storage solutions like Filecoin are directly competing with the likes of Amazon Web Services. Companies like Amazon are well-positioned to offer subsidized storage costs to users due to their scale of operations. Filecoin can possibly capture some share of the Web3 storage market but cannot undercut big names like Amazon. 

The nuances of how does Arweave work explains how they provide indefinite storage with one time payment. Instead of competing in the pay-as-you-go storage market, Arweave carves out an entirely new niche to dominate – the permanent storage market. Blockchain storage solutions and internet archiving are two major use cases of Arweave. For instance, Solana stores its blockchain data on Arweave and the Internet Archive has partnered with Arweave to archive the internet data.   

Ease of Participation

Filecoin recommends miners to have 128-156 GB of RAM and a 24 Core CPU to provide storage services on their network. In short, only miners who can invest a significant sum in powerful machines can participate in the Filecoin ecosystem. 

Whereas, joining the Arweave network is much easier. Miners only need a Linux system with a minimum 8 GB RAM to start producing new blocks on the Arweave network.

Arweave Investors and Partnerships

Since its launch, Arweave has raised a total of $22 million USD from 14 investors. Arweave's investors include prominent names like Union Square Ventures, Coinbase Ventures, and Andreessen Horowitz to name a few. 

Recently, in March 2022, Ardrive, a decentralized storage startup built on Arweave, raised $17.2 million to build decentralized access points for Arweave's permaweb. 

Moving on to other funding updates, Arweave-based projects like KYVE, Pianty and ArDrive raised millions in funding, the highest being $17 million raised by Ardrive. The world's largest crypto asset management firm Grayscale revealed that it is considering adding Arweave among other crypto assets to its investment products. 

Arweave’s Strengths, Weaknesses, Opportunities, Threats (SWOT Analysis)

Strength 

Arweave's unique proposition is providing indefinite data storage at a budget-friendly cost. In contrast to other decentralized storage solutions, like Filecoin, Sia, and Storj, that store your data for as long as you are paying for your storage, Arweave offers permanent data storage by leveraging its storage endowment mechanism. The fact that Arweave provides services for major blockchains like Solana, Arbitrum, Avalanche, and Polygon as well as popular DeFi projects like SushiSwap, Uniwap, and Yearn Finance, speaks volumes about its services. 

Weaknesses

The fact that there are currently only 60 nodes on the Arweave network raises questions about how decentralized Arweave actually is. Although Arweave positions itself as a censorship-resistant storage solution, it has a content moderation policy that does not obligate users to store data if they do not want to.  

Opportunities

Arweave has the potential to become the de-facto archival solution. With its stack of technologies enabling developers to easily build applications on their network, Arweave is well-positioned to become a hub of decentralized solutions on its network. The Open Web Foundry grant will only accelerate the development of applications on Arweave. 

Threats 

If you look at the wallets holding AR tokens, you would realize that a small number of wallet accounts hold the majority of the AR supply. Such skewed distribution can harm AR value if these wallets collectively start selling AR tokens. Another thing to worry about AR is that the apps built on Arweave have less user participation indicating slow adoption.

Arweave Roadmap 

Arweave does not have an official roadmap. However, their yellow paper mentions planned Arweave improvements like Wallet Logs and Fast Find. With Wallet Logs, the Arweave blocks will have append-only wallet logs instead of a wallet list that contains each wallet ever used in the blockweave. Fast Find is aimed at increasing data retrieval speeds by encouraging nodes to redirect users to nodes that can provide the requested data. 

Sam Williams, the founder of Arweave, has also revealed some of Arweave's future milestones during media interactions specifying that Arweave's aim is to become the backbone of all decentralized applications in the crypto space. Polkadot integration, Arweave-powered archival services for institutions like governments, and funding for around 1,000 projects building on Arweave via Open Web Foundry were also hinted at by Sam. 

Arweave News Highlights

From mainstream media mentions to funding, Arweave has been in the news for all good reasons. In September 2021, a decentralized streaming protocol released a Web3 Index that ranks Web3 solutions based on their usage. Arweave has held the top position on the Web3 Index since the ranking platform went live. 

Talking about partnerships, leading indexing protocol The Graph, the decentralized blogging platform Mirror, and the popular layer-2 scaling solutions Polygon and Arbitrum have integrated with the Arweave network. Arweave is also leading the efforts to archive information relating to Russia's invasion of Ukraine as much as possible. 

What Are the Different Use Cases of Arweave?

Permanent Storage 

The primary use case of the Arweave network is to provide permanent storage for your data. Once you store your wikis, pdfs, videos, and web apps you can access them forever as long as you have an internet connection. Most importantly, data once stored on Arweave cannot be manipulated, thereby maintaining the integrity of the stored information. Be it storing blockchain data, NFTs, archiving internet data, or storing institutional records, Arweave can be used for different storage purposes. 

Building Decentralized Applications

You can also use Arweave to host decentralized applications at zero maintenance costs. The permaweb provides all the necessary tools to deploy your dApp. You get an Arweave core data replication system, content delivery servers, GraphQL powered querying system, and a smart contract system called SmartWeave to build decentralized applications on Arweave. 

SmartWeave smart contracts follow a 'lazy execution’ approach. Here, the task of validation is assigned to the smart contract users rather than to the network nodes. This frees the network from gas and transaction fees for each smart contract interaction. 

Where To Buy AR?

You can easily buy AR on OKX at the best spot market rate thanks to our highly liquid markets. Our easy navigation and simple buying process enable you to complete your AR purchase in less than five minutes. If you are new to OKX, visit okx.com and sign up with OKX using your email or phone. Now, buy USDT or deposit existing USDT tokens on OKX and simply trade USDT to buy AR on our spot trading window. 

How To Store AR Tokens?

Once you buy AR on OKX spot markets, it gets credited to your OKX trading account. You can securely store it there or transfer it to your OKX funding account and withdraw your AR holdings to Arweave's official wallet. Here's a guide on how to set up your Arweave wallet. 

FAQs About AR 

• How To Mine Arweave?

Arweave recommends a Linux client with a minimum of 8GB of RAM to mine AR tokens. To start mining on Arweave, you need to install the miner, set up the file descriptors limit, and trigger the mining process.

• Can I Store AR Tokens in an External Crypto Wallet?

No. AR tokens are not compatible with other blockchain addresses or wallets. You can simply hold your AR tokens on exchanges like OKX or store your AR holdings on Arweave's official wallet. 

• What Type of Data Can I Store on Arweave?

Arweave supports all sorts of file formats, like pdfs, videos, wikis, websites, etc. You can even store your NFT metadata on Arweave. Nonetheless, Arweave has a content moderation policy that gives data storers on the network the right to choose whether or not to store the data. If the users who store data on Arweave find the information illicit or the local data rules and regulations do not align with the required data storage, they might choose not to store the data.  

• How Much Money Do I Need To Store Data on Arweave?

Arweave charges a one-time upfront fee to store your data indefinitely on their network. The storage fees are quoted in AR and thus the prices might change depending on the value of AR tokens. At the time of this writing, you need to pay roughly $3.212 USD per GB of data stored on the Arweave network. This relatively much lower than traditional storage and other blockchain based storage solutions.

• How Much Capital Do I Need To Invest in AR?

You can buy as low as 0.1 AR on OKX. Register with OKX and visit our trading page to purchase AR at the best spot market rate within seconds.