Arweave (AR) — a worldwide decentralized hard drive

Data storage and protection organization is one of the topical problems that modern solution developers strive to solve. Blockchain-based distributed data storage technologies have presented new opportunities for creating a unified yet secure and confidential global file space. One such project is Arweave, which will be discussed in this article.

What is Arweave?

Arweave is a Storage-as-a-Service platform created for decentralized data storage. In essence, the Arweave network is a huge hard disk distributed on multiple nodes, solving the problems of long-term data storage, privacy, and security.

The Arweave project was created in 2017 and was originally named Archain. However, in 2018, the project team rebranded it and renamed it Arweave.

Despite the AR acronym, the Arweave project is not related to augmented reality and is simply an abbreviation of the first two letters of the project. Arweave's global goal is to create a worldwide, perpetual digital archive similar to the famous Library of Alexandria.

How does Arweave work?

At the center of Arweave is the Blockweave protocol, a file storage system. Blockweave is not a blockchain and is different in principle from many decentralized networks that require nodes to synchronize all data and blocks.

To connect to the Blockweave network, a node only needs to upload the last block. This was made possible by storing hashes of all previous blocks, which allowed nodes to verify transactions without having to download the entire blockchain history.

Blockweave's structure is more like a graph (a tree of blocks) than a sequential chain and is more similar to the Hedera Hashgraph protocol. Hence the name, which literally means intertwining blocks.

Initially, the Arweave network was powered by a hybrid consensus based on Proof-of-Work (PoW) and Proof-of-Access (PoA). However, in 2021, the protocol team moved the network to the Succinct Proof-of-Random-Access (SPoRA) consensus mechanism, an improved version of the PoA algorithm. The SPoRA consensus encourages miners to maintain their nodes separately rather than merging with the rest of the nodes, thus making the network more decentralized.

Problems that Arweave solves

One of centralized storage services' major and classic problems is censorship: users are set limits on certain types of data. Arweave does not restrict users in what data they can store in a distributed file system. However, nodes (nodes) choose what data they will store on their devices.

Another problem with centralized services is the possibility of user data leakage and compromise, which can lead to minor inconveniences and serious problems.

In terms of data storage organization, Arweave is similar to the decentralized Filecoin and Sia platforms: different "chunks" or pieces of data are encrypted and distributed among nodes, virtually eliminating data theft. Even if an attacker manages to steal one of the fragments and decrypt it, he will not be able to recover the data completely.

The first component of the Arweave system, Permanent Storage, performs all of these functions. This component translates to "permanent storage." However, Arweave has another but no less critical component called Permaweb, which is essentially storage for web pages.

With Permaweb, data manipulation is avoided, and the original version of a web page can be accessed at any time. This was one of the original goals of the creators of Arweave — to fight unreliable information. Permaweb is essentially an analog of WebArchive, which stores snapshots of web pages, but its owners have complete control over the data of this resource. Unlike WebArchive, Permaweb is decentralized and excludes any possibility of modifying or deleting the contained data.

AR cryptocurrency

AR is the native cryptocurrency of the Arweave platform, which includes such features as:

• Payment of network commissions — rewarding nodes for the work they do in confirming transactions and mining blocks;
• Rewarding nodes for storing fragments of user data;
• Payment by users to Blockweave for data storage services;

Each user pays with AR cryptocurrency once when each file is posted. This payment is divided into two parts:

1. An advance to cover the cost of storing the file immediately for 200 years in advance;
2. A share of the money goes to the Arweave fund for future costs.

In this way, the payments to the nodes do not go directly to them but through a special fund and are distributed over several years.

Arweave perspectives

The number of incidents involving the compromise of sensitive information continues to rise. According to Statista, more than 3,200 data breaches were detected in the U.S. in 2023, affecting more than 353 million users. By comparison, only 1,862 such cases were discovered in 2022, although the number of people affected was slightly less — approximately 298 million users.

This could lead to increased demand for decentralized storage services, which will be cheaper than their centralized counterparts due to the ever-increasing costs of maintaining data centers.

As of November 2023, the Web3 storage market was estimated at just $2.86 billion. However, analysts expect it to reach $116.5 billion by 2033, with a compound annual growth rate of 44%.

Arweave ranks 2nd by capitalization (~$2.7 billion) in its segment of decentralized storage platforms after Filecoin and beats other well-known projects such as BitTorrent, Ocean Protocol, Siacoin, and Holo by a significant margin. At least shortly, Arweave is likely to consolidate its current positions as it demonstrates steady growth in various market indicators.