What is Arweave?
Arweave is a blockchain startup that has developed a unique blockchain structure known as the blockweave. This platform allows for cost-efficient, scalable on-chain data storage. As more data is added to the system, the amount of hashing required for consensus decreases, resulting in a decrease in data storage costs.
The Arweave ecosystem utilizes its native token, AR, which has a maximum supply of 66 million. This multi-utility token is used to pay for data upload fees within the network and to reward miners.
The history of Arweave begins in 2017, when the company was founded under the name Archain. In 2018, after completing the Techstars Berlin mentoring program, the company changed its name to Arweave. The goal of the company is to provide permanent, low-cost internet storage through the Arweave network and its block-based data structure, the blockweave.
In June 2018, the Arweave mainnet was launched with a small group of 1,800 members from various countries. Before the launch, the Arweave team also had a first token sale that was restricted to whitelisted individuals. In November 2019, Arweave received a $5 million fundraising round from various venture capital companies. In March 2020, the Arweave team raised an additional $8.3 million from Andreessen Horowitz, USV, and Coinbase Ventures, in exchange for AR tokens. Following this round, Arweave stated that it would use the funds to drive community adoption and development.
The Arweave network has a maximum circulation of 66 million AR tokens, of which 55 million were distributed during the genesis block during the network’s launch in June 2018. Arweave plans to gradually introduce another 11 million AR tokens through block mining rewards. The Arweave permanent storage solution has been integrated on Polygon in November 2021 and on Avalanche in April 2022.
The Arweave blockweave is the foundation of the permaweb, which is a collection of data, websites, and apps on the blockweave. The Arweave protocol allows anyone with excess hard drive space to store data in exchange for AR tokens. The protocol takes into account that the cost of storage will continue to decline and employs a formula to predict the cost of storing a given piece of data.
The protocol includes a novel data structure known as the blockweave, and a new consensus method called proof of access (PoA). The blockweave protocol has a block-based structure where each block is connected to two other blocks – the one immediately before it and another block chosen at random.
The recall block is a randomly chosen block within the protocol’s history. It is determined by taking the current block’s hash and computing its modulus about the current block height. Miners must provide hashes from both previous blocks to construct a new block and receive the block reward using the Arweave native token AR.
As the permaweb is based on Arweave, users can expect reliable and immutable access to its content. Once published, permaweb apps and websites will be visible for the duration of the Arweave protocol’s functioning. Since a wallet’s information in the blockweave is signed, data uploaded to the permaweb is associated with an identity, even if it is a pseudonym. Arweave can also be used to store NFTs permanently. The company aims to significantly change the data storage industry norms and build a new Internet where information is always available.
In summary, the main use of the Arweave (AR) token is to incentivize miners to maintain copies of data in the network. While miners earn from transaction fees, they do not receive them all at once as Arweave uses a system that gradually releases AR tokens over time. The majority of the transaction fee is allocated to a storage ‘endowment’, which is distributed to miners after it accrues interest. This incentivizes miners to continue to maintain copies of the data, ensuring that it remains accessible and permanent on the network. Arweave's unique blockchain structure and token economics aims to revolutionize the data storage industry by providing a cost-efficient, scalable, and permanent solution for storing data on the blockchain.
The investment information, comments, and recommendations provided here do not fall under the scope of investment consulting. Therefore, making an investment decision based solely on the information and comments provided here may not yield results that meet your expectations.
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