Arweave is a Decentralised Storage Network (DSN) where people with extra computer space can connect with those who need storage solutions. This is unlike traditional storage solutions that usually store data on servers. What makes Arweave all the more unique is that it offers permanent storage for a single upfront payment. Read more about the project and why its native token AR has been shooting for the moon in recent times here-
The crypto market is currently experiencing one of its worst winters ever, with most coins trading well below their all-time highs. For instance, Bitcoin is down 69 percent from its November 2021 ATH of $68,789. It's a similar story with Ethereum, which has dropped 67 percent of its $4,891 ATH from the same period. Fortunately, most tokens have shown a slight recovery over the last two weeks, and leading the pack is the native cryptocurrency of the Arweave blockchain. Tag along as we tell you more about this project and why its native token has been shooting for the moon in recent times.
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What is Arweave?
Judging from its name, Arweave sounds like some augmented reality (AR) or metaverse platform. However, it is a Decentralised Storage Network (DSN) where people with extra computer space can connect with those who need storage solutions. This is unlike traditional storage solutions that usually store data on servers. What makes Arweave all the more unique is that it offers permanent storage for a single upfront payment.
There are many other blockchain-based storage solutions, such as Filecoin and Storj. However, most of these solutions work on a monthly or yearly payment system. So, how does Arweave operate using a single payment system? The platform uses a sustainable endowment system, wherein a large chunk of the storage fees are deposited to earn interest. Arweave then uses the interest to pay for future storage costs.
However, there is some fine print one should go through in the storage contract. The platform only guarantees storage for as long as the endowment has enough value. As per the firm's calculations, it should be enough to store data permanently. However, as a conservative estimate, the contract only guarantees 200 years of storage.
How does Arweave work?
First and foremost, we must learn about Arweave's permaweb, which the firm describes as a "global, community-owned web that anyone can contribute to or get paid to maintain." Like any other blockchain network, Arweave is made up of a collection of blocks. These blocks contain all the data of a website and/or application and make it accessible on the permaweb.
Also Read: Fresh round of crypto job cuts: Dapper Labs, Galaxy Digital, Crypto.com among firms looking to downsize
Now, with traditional blockchains, every block contains a link to the previous block, creating a chain-like strucuture. However, with Arweave, each block is linked to a preceding block and a second block from the network's history.
This second block is known as its "recall block" and the overall structure of the network is known as a blockweave, as opposed to a blockchain. This unique structure is how the project gets its name.
The block structure is also pivotal to Arweave's Proof-of-Access (PoA) consensus mechanism. Unlike Bitcoin, where network participants need to solve complex mathematical problems to add new blocks, Arweave requires each computer taking part in the network to check whether they have access to a randomly selected recall block. Only if they have access to the recall block can they add a new bundle of transactions and receive a reward in the form of the platform's native AR cryptocurrency. Therefore, PoA incentivises long-term data storage as miners need to access older, random blocks from the blockweave's history to mine new blocks and receive mining rewards.
A look at the platform's native token and why it is skyrocketing
Arweave's native token is called AR. The platform released 55 million AR when the project's genesis block was created. It also has an additional 11 million AR tokens that will be distributed as mining rewards. AR is used as a mode of payment for Arweave's storage solutions. The token saw a significant spike on November 3, jumping from the $9 range to a high of $17.42. This is after Instagram announced that it would leverage Arweave to store its creators' NFTs. However, AR has been on a slightly downward trend since then, currently trading at $13.91.
The unique features of Arweave make it a viable blockchain for the future. It is already the storage solution of choice for several other networks, such as Solana, Avalanche, Polkadot, Cosmos and the NEAR protocol. Its promise of "forever" and unique blockweave structure also elevate it from a mere data storage protocol to an entire, impermanent layer of the internet. As such, it could find plenty more utility in the coming years.