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 behind it.
What is Arweave? Essentially, Arweave is a global hard drive that never forgets. It is supported by a decentralized network and incentivized by tokens (AR), providing permanent and sustainable storage of any type of file for a one-time upfront fee.
Arweave was created to solve the problem of long-term data storage. But it is more than just a passive data lake with millions of permanent files stored in it. A large ecosystem of infrastructure and software projects use Arweaves protocol to create many applications that would be impossible with non-permanent data.
In this article, we will go through the Arweave protocol and show you what it does. This is a detailed read that will help you understand what it is all about, and we will break it down into the following sections:
Arweave 101 — Permanent Storage and the Permaweb
Technology: Blockweave and Proof of Access (Spora)
Economics: Incentives for funding and financing permanent storage
Layer 1 and the ecosystem built on permanent data
Arweave 101: Permanent Storage and the Permaweb
Peter Thiel coined the term “zero to one” to refer to the invention of something that has never existed before. Persistent data storage is exactly that — something that has never existed before.
Arweave provides two features that are unprecedented in today’s Internet:
Permanent File Storage — The ability to save any type of file to the Arweave network (documents, MP3s, PDFs, movies, digital artwork, etc.) Through Arweave’s innovative economic system (more on that later), a fund has been established that can fund decentralized network data storage for at least 200 years, and likely much longer.
Permaweb — The ability to permanently preserve web pages and applications so that they continue to function as originally designed and remain permanently indexed and searchable.
As Arweave puts it:
“The Permaweb will look like the regular web, but all of its content — from images to full web applications — will be permanent, quickly retrievable, and decentralized — forever. Just as the first web connected people across vast distances, the Permaweb will connect people over vast distances.”
How does Arweave create permanent storage and the Permaweb? Arweave implements storage through two components:
A technical component that transforms blockchain into Blockweave
An economic component that creates an endowment fund that can cover future storage costs
Before focusing on the economic components, let’s take a look at the technical aspects.
Technology: Blockweave and Proof-of-Access by Arweave (Spora 2.6)
Arweaves first major breakthrough is Blockweave, an iteration of blockchain technology. The traditional blockchain data confirmation method is sequential: each piece of data in the database is added to a long chain and verified in order. This is how Bitcoin works - about 150 new blocks of data are added every day.
With Arweave’s Blockweave, only a random piece of data needs to be verified before new data is added. Therefore, the result is not a long chain of data, but more like a data weave or a three-dimensional spider web.
Because the verification process is shortened, the energy required to run Blockweave is greatly reduced. Blockweave is able to efficiently store large amounts of data - blockchains such as Bitcoin cannot manage 400 MB of data.
Ultimately, Blockweave maintains the immutability (unchangeability) of blockchain technology. All data put into Blockweave stays in it. Once data is in Blockweave, it cannot be deleted. This does not mean that all information is publicly visible, but that information cannot be removed.
As with other blockchain technologies, as new data is uploaded, the network continually verifies the data to confirm the existence and accuracy of all data.
“From now on, your data transactions will be verified more than 5,670 times a day. That means the integrity of your data will be checked every 14.4 seconds. This is the highest level of data verification currently available.” - Sam Williams, founder of Arweave
The Arweave protocol is still being tweaked to optimize performance. The latest protocol updates include:
Scalability with bundled transactions: Arweave allows up to 1,000 transactions per block. These transactions do not need to represent a single file — they can be “bundles” containing multiple transactions or large data sets. Bundles can even nest other bundles, allowing Arweave to handle unlimited amounts of data.
Incentivize miners to replicate data with minimal energy consumption: Miners can now compete for rewards using standard desktop hardware. Arweave increases rewards for miners based on the amount of data replicated, 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, watch this presentation from Forward Research: https://youtu.be/sIccEJTVHXg Now let’s take a look at Arweave’s economic innovations.
Arweave Incentives: Economics and AR Tokens
The basis of Arweave is the decentralized network that actually stores the files added to it.
Arweave’s Blockweave only needs to verify a random piece of data before adding new data. Therefore, the result is not a long chain of data, but more like a data weave or a three-dimensional spider web.
Because the verification process is shortened, the energy required to run Blockweave is greatly reduced. Blockweave is able to efficiently store large amounts of data - blockchains such as Bitcoin cannot manage 400 MB of data.
What incentivizes the network to store your data long term?
People around the world store data on Arweave because they get paid to do so. Just like you wouldn’t work for free, they won’t store your data for free.
To store documents for centuries requires a durable economic incentive.
How does Arweave solve this problem?
Introducing the Arweave Token (AR). Arweave created a crypto token AR that serves as payment for storing data on the Blockweave network. People who store permanent data are paid AR (which they can exchange for regular currency on digital exchanges).
But the economic system is a little more complicated than that.
When you upload a file to the Arweave network, you pay a one-time fee. This fee is divided into two parts:
As a down payment for the initial storage costs for 200 years
The remainder goes into a fund to cover future storage costs
The first question is: 200 years is a long time, isn’t it expensive to pay for that much data storage upfront?
It sounds expensive because we are used to prices going up in almost every area of life. But data storage is one of the few areas where prices are constantly going down. Over the past 50 years, the cost of data storage has fallen by an average of 30.5% per year.
Prices fluctuate slightly, but for $1 you can upload 400 photos or 3,500 office documents permanently to Arweave. Check the latest prices on the ArDrive price calculator.
Reduction in storage costs
Arweave works under the assumption that storage costs will continue to decline over time. Given technological advances and society’s increasing need for data storage, this seems a highly reasonable assumption.
So, in order to make the economics of perpetual storage viable, is Arweave assuming that the cost of data storage will continue to fall by 30.5% per year?
No, absolutely not! To make the economics work, Arweave assumes that the cost of data storage only decreases by 0.5% per year.
Again, the initial cost of uploading data to the Arweave network partially covers the first 200 years of storage. If storage costs drop by more than 0.5% per year, this will increase the number of years that data can be stored.
Arweave Fund
If part of the one-time fee goes toward the initial storage price, what does the rest go toward?
Arweave’s payment system is designed so that a portion of the fees for hosting data goes into a fund. This fund will pay for storage costs through the interest generated.
Think of it like a university endowment. The university uses the interest from the endowment to pay for school expenses, such as endowing faculty positions, without touching the principal. Unlike a typical university, where costs are constantly rising, Arweave uses the interest to pay for storage costs, which are falling rapidly. Even if storage costs dont fall, the one-time storage fee and the accumulated endowment can still cover 200 years of storage costs.
As of January 2023, Arweave’s fund has accumulated over 44,000 AR to ensure that future data storage is adequately compensated. This fund is the economic driver that incentivizes decentralized networks to store data for decades to come.
For further reading, check out Can Data Really Be Stored Forever? Watch Coin Bureaus 20-minute video on Arweave: https://youtu.be/reQxl5Rl4tE
Arweave Ecosystem: Layer 1 and Multilayer Environments
We’ve discussed how Arweave provides permanent data storage. But the story doesn’t end there. The advent of permanent data opens up the door to new software applications.
Arweave is a layer one blockchain - a foundational layer on which other technologies can be built. In other words, Arweave provides a base layer of permanent data, capable of verifying and completing transactions without the need for other networks, and a robust set of multi-layer infrastructure and applications on top of it.
Why is data storage so exciting?
Data storage is inherently boring. So why are Arweave users excited about it?
Storage itself isn’t that interesting, but the issues it reveals — reliance on big tech, privacy issues, hacker attacks, and unexpected data loss — are extremely relevant in the modern world. In addition, the advent of permanent storage has created a community of “permaweb pioneers,” developing software that was previously impossible.
A chart from SevenX ventures breaks down Arweave into three components: utility, 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 NFTs that combine proof of ownership with the asset itself
Smart Contracts: Self-Executing Computer Code
Robust infrastructure: data availability, decentralized gateways
User applications: social media, file sharing applications, archives
Public data records
Business Solutions
Property rights issues
Indelible record of ownership
Developer Tools
Scalability
Arweave is a modular blockchain where the execution layer is independent of the consensus and data availability layers. In other words, Arweave is more like Lego blocks that can be snapped together to build the developer’s dream application. This enables developers to build:
Scalable: fast speed and large capacity
Efficient: low cost
Decentralization: Established through consensus
Organic The Arweave community is considered one of the most helpful and inspiring in the blockchain space.
Teams from different projects are collaborating to build a complete set of infrastructure and applications to take advantage of persistent data.
Arweave has also been called the sleeping giant of crypto because when people realize its capabilities — and what its already doing, they will turn to permanent storage to replace temporary data storage. Tech giants including Meta have already begun uploading data to the Permaweb. If this trend continues, Arweave is expected to become the backbone of Web3, the future of the Internet.
Arweave — The Backbone of Web3
Arweave’s practicality, scalability, and organic nature point to it becoming the backbone of Web3.
Looking at its ecosystem, you’ll find that Arweave is more than just storage, it’s a full suite of multi-layer infrastructure and applications.
People, applications, organizations and businesses will have access to secure, permanent data storage and will be able to use that data in many different ways.
There are multiple layers in the Arweave ecosystem:
Application Layer
Tool layer
Decentralized CDN Layer
Off-chain computing and expansion layer
Decentralized Gateway Layer
Database Tier
Smart Contract Layer
Arweave Protocol
Yes, Arweave is permanent storage. However, the foundation for permanent storage has grown into a multi-layered environment.
As the world gradually realizes the full capabilities that Arweave has to offer, it will be exciting to see what new and exciting creations this ecosystem brings to the table.
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Earn experience points (EXP) through missions - an on-chain token that represents potential eligibility for AR.IO airdrops. In other words, EXP allows you to level up to receive the IO token mainnet airdrop!
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