Arweave

What is Arweave (AR)?

Arweave is a decentralized network that lets you store documents and applications in perpetuity.

It’s a common trope, even a meme, that the internet never forgets. This often goes hand in hand with the Streisand Effect, which says that when you attempt to hide, get rid of, or censor information, it spreads even more.

However, there are nuts and bolts behind all of these. Information on the internet needs to be stored somewhere if it is to be visible. When large, well-capitalized entities want information erased, they have a whole host of tools for the job.

Thus, information can often disappear or be removed from the public eye, and it is often up to individuals who have stored the data to help it resurface. As such, while the data is still out there, it can be all but buried.

This is where Arweave comes in, describing itself as a “collectively owned hard drive that never forgets.” Arweave makes information permanence sustainable, letting users and developers immutably store data forever.

When Was Arweave Launched?

Arweave was first announced on the popular bitcointalk forum in August 2017 and was called “Archain” at first. A few months later, the project changed its name to Arweave and officially launched in June 2018.

Shortly prior to the mainnet launch, Arweave held a small token sale, which drew interest from over 30,000 people. Given this vast interest and only a few tokens on offer, the Arweave team decided to implement a multi-step application process. 15,000 people completed this process to purchase AR tokens.

This “proof-of-interest” process led to a token sale capped at GBP 500,000 (around $675,000). This followed a previous community token sale for early backers that raised over GBP 650,000.

In a blog post detailing these token sales, the Arweave team stated they would employ a hard cap of GBP 6.4 million across their token sales.

Arweave received a lot of institutional investment in seed rounds, including from Block0, KuCoin Capital, JD Capital, 1kx, One Block, Chainfund Capital, and many more.

Who are the Founders of Arweave?

Arweave was founded by University of Kent Ph.D. candidates, Sam Williams and William Jones.

Williams developed an operating system called HydrOS as part of his academic work and has experience with decentralized and distributed systems. Jones’ areas of interest were graph theory and neural networking.

According to Williams, he conceived the idea behind Arweave while hiking up a mountain in Scotland. Williams then shared the concept with Jones, and the pair developed the technical details together.

Williams dropped out of graduate school to focus on Arweave’s development, but Jones left the project in mid-2018 to complete his Ph.D.

How Does Arweave Work?

Arweave creates a new, censorship-free data protocol on a blockchain-like structure called the “blockweave.”

Based on a novel proof-of-access consensus mechanism, the blockweave makes truly permanent, low-cost data storage a reality.

The blockweave is based on a simple principle: as the amount of data stored in the system increases, the amount of hashing needed for consensus decreases. Thus, the cost of storing data is reduced.

To enable this, Arweave uses a self-organizing network topology system. This system ensures that miners on the network are selfishly incentivized to store and share data as quickly as possible with other miners.

Each of the nodes maintains its own “karma” ranking of other peers. They track how fast other nodes grant them access to data upon request and, therefore, optimistically interact with each other. This leads to a Nash equilibrium in which all nodes are incentivized to share resources freely and perform pro-social behaviors.

To support a network that allows for long-term on-chain data storage, Arweave has a system that supports an unlimited block size. On Arweave, transaction distribution is decoupled from block distribution, so a “shadow” of the block can be moved around the system rather than the block itself.

What Makes Arweave Unique?

Arweave plays host to a permanent and decentralized web called the “permaweb.” As well as storing static files in perpetuity, the permaweb can also host decentralized applications. These dApps live independently inside the permaweb, governed purely by their own code.

As a blockchain-like protocol, the permaweb is immutable, and applications atop it can be used by anyone in a permissionless manner.

Arweave also features a profit-sharing mechanism within its protocol. Referred to as Profit Sharing Communities (PSC), they are decentralized governance structures that can be deployed in permaweb apps and powered by profit-sharing tokens.

This mechanism allows the application to share the profit generated by it directly with builders, funders, and users. It also enables the application’s community to control and organize the application itself via voting.

Developing apps on Arweave is easy. The Arweave community has built a complete suite of tools and services that allow the launch of completely decentralized applications atop the permaweb.

These tools offer UI hosting, database writes and queries, as well as smart contracts for programming financial rewards and incentives.

How is the Arweave Network Secured?

The Arweave network is secured via a novel proof-of-access (PoA) consensus mechanism, which consists of multiple phases:

At the time of generating a block, a network-wide search subspace amounting to 10% of the network is chosen for nodes to read random data from.

The candidate block’s metadata and a random number (the nonce) are hashed together using RandomX.

The output of the resultant hash is reduced to be within the range given by the search space size. This number is added to the base of the search space from phase 1 and is used as the “challenge byte.” This is a point in the dataset that the miner must prove they can access to continue mining.

The miner attempts to read the chunk containing the challenge byte from the disk and into memory. If the miner does not hold a copy of the given chunk, they restart from phase 2.

The miner reads or recreates, as appropriate, the proof of inclusion of the given byte at the appropriate location in the dataset (the Merkle proof).

The block metadata, the Merkle proof, the chunk, and the nonce are then hashed together using RandomX.

The output of this hash is interpreted as a number and validated against the network’s current difficulty level. All but one attempt per block production cycle will fail this validation check. Those miners will restart from phase 2.

When the node has produced proof for a valid candidate block, the Succinct Proof of Random Access (SPoRA) and block header are distributed to the rest of the network.

This system has several benefits, one of which is that the miners are incentivized to ensure wide data replication. Providing access to less well-replicated sections of the network can allow miners to pass phase 7 at a higher rate.

What is the Use of AR?

AR is the native token of Arweave, and it is divisible into sub-units called Winstons, where 1 AR = 1 trillion Winstons.

AR has two main use cases. Firstly, AR is used for rewarding miners via block rewards. This is designed to incentivize miners to create and validate blocks and host data in an economy that makes it profitable to do so.

Secondly, users have to pay AR as a transaction fee to write a transaction into a block. This fee goes toward a storage endowment, which is gradually distributed to miners.

Who Controls Arweave?

Arweave is a community-owned and operated open-source network. While the protocol is permissionless, not all data can be stored using Arweave.

Data storers can choose whether or not to replicate the data associated with transactions that are submitted to the network. Transactions can be screened and filtered, checking against known illicit material.

Arweave’s yellow paper details the project’s specifics regarding content moderation, and the Arweave founding team works with the Internet Watch Foundation in this regard.

How Much AR Is In Circulation?

As per the project’s yellow paper, the AR token has a maximum supply of 66 million. When Arweave's genesis block was validated in June 2018, 55 million AR tokens were created. The rest will be given out as block rewards.

19.5% of the token supply to its private sale, 13% for the team subject to 5-year vesting, and 26.5% for future project use.

It must be noted that Arweave announced multiple investment rounds after the launch, including one in November 2019 and one in March 2020. Union Square Ventures and Andreesen Horowitz, also known as a16z, participated in both rounds.

How Do You Buy AR?

Due to its popularity, the AR token is available on several top-tier exchange platforms. It can be purchased using a variety of stablecoins and cryptocurrencies.

You can also mine Arweave and become part of the network. For this, you need to have a machine with a minimum of 8 GB of RAM, free hard drive space, and computational power to spare.

How Do You Store AR?

You can store AR tokens on the Arweave.app Web Wallet, as well as ArConnect or Finnie. All of these are wallets developed by the Arweave community. Arweave’s documentation has an extensive tutorial on setting up an Arweave wallet.

You can also store AR on an exchange account, but it can’t be used on the Arweave network since your exchange account isn’t technically a usable crypto wallet under your control.

Arweave Energy Consumption

Arweave’s energy consumption depends on the size of its permaweb, since more connected devices means more power. However, that is also true of existing data storage, and corporations spend ten to two hundred billion dollars on data centers every year.

Is AR a Good Investment?

Arweave solves a very significant problem in the modern internet age, and it does so in a novel way despite being in an underserved niche.

Decentralized by design and nature, Arweave is a principled, idealistic project that has generated significant excitement among both retail and institutional investors.

There is an element of permission when it comes to screening what data is stored on the permaweb. Aside from this, Arweave holds true to many of the founding principles of the cryptocurrency industry.

If decentralized storage is the future, then there’s every chance that Arweave could be a prominent part of it.