The Three Pillars of Web3 and Arweave's Innovations

Web3, as the prototype of the next generation of the internet, is being built upon three fundamental components: consensus, storage, and computation. The wave of decentralization brought about by blockchain technology has been further extended under the concept of Web3, aiming to achieve the decentralization of the entire internet.

In the field of decentralized storage, the application of peer-to-peer network technology has created a global, trustless, and immutable virtual hard drive. Arweave, as a pioneer in this field, offers a cost-effective solution that not only ensures the permanence and immutability of data but also possesses censorship-resistant characteristics, which perfectly meet the growing demand for NFTs and decentralized applications.

According to predictions by the International Data Corporation, by 2026, the global data generation volume will exceed 221,000 exabytes (EB). To put it in perspective, 1 EB is equivalent to 1,048,576 TB, which means that by 2026, the total amount of global data will reach an astonishing 23.17 billion TB. Such a massive scale of data highlights the tremendous market potential of decentralized storage protocols like Arweave.

Arweave is expanding into the field of decentralized computing, with its AO computer designed as a "super-parallel" computing system aimed at combining large-scale AI models with smart contract technology. The design concept of AO is to integrate the high processing capabilities of certain L1 blockchains while maintaining the verifiability required by decentralized projects.

As the global AI market is expected to grow to approximately $257.516 billion by 2032, with an annual growth rate of 19%, the importance of decentralized AI technology is becoming increasingly prominent. It not only addresses the issues of transparency and control in traditional machine learning but also promotes a fairer and more open AI ecosystem, effectively protecting intellectual property and personal data. Arweave's innovations in decentralized storage and computing make it a leading force in the Web3 movement, not only meeting critical market demands but also expanding its potential applications.

Arweave: Reshaping the Future of Data Storage

Arweave, as a revolutionary decentralized storage protocol, aims to achieve permanent data storage through a one-time payment. The system is primarily composed of two key components: blockweave and permaweb.

Blockweave, as the storage infrastructure of Arweave, is responsible for handling storage requests and replicating data. It employs a consensus mechanism called Simplified Proof of Random Access (SPoRA), which ensures that network nodes must provide cryptographic proof of access to previously uploaded data before accepting new data.

On top of the blockweave, the permaweb layer mimics the structure of the traditional World Wide Web, providing a human-readable interface. Unlike traditional web pages, content on the permaweb cannot be altered once uploaded, ensuring the permanence and immutability of websites and decentralized applications.

Arweave supports smart contract functionality through its SmartWeave platform. Unlike traditional blockchains like Ethereum, SmartWeave computes the contract state only on the local device that requests the execution of the contract, a design that significantly improves efficiency and scalability.

AR is the native token of the Arweave network, primarily used for paying storage fees. Most of these fees go into a storage donation fund, aimed at covering storage and network maintenance costs in the long term. Based on historical data, the annual decline rate of storage costs is 30.57%, which further supports the long-term sustainability of the protocol.

Miners in the network earn rewards through various means, including transaction fees, the gradually decreasing issuance of inflationary tokens, and payments from donation funds.

The token economics model of Arweave includes an initial issuance of 55 million AR tokens, as well as an inflationary issuance of 11 million AR. Over time, these issuances will gradually decrease until the total circulation reaches 66 million AR. It is worth noting that the protocol does not adopt a token burn mechanism, maintaining a fixed supply.

The Dynamic Development of the Arweave Ecosystem

In December 2023, the Arweave community experienced a controversy regarding a potential fork. Founder Sam mentioned on social media that Irys might fork Arweave, sparking extensive discussions within the community. Several ecosystem participants expressed their positions, some in support and others against. Ultimately, the founder of Irys clarified this misunderstanding, stating that there are currently no fork plans, and Sam also welcomed Irys to reintegrate into the Arweave community.

The Arweave network upgrade in March 2024 introduced a coordinated mining mechanism that allows multiple nodes to work together, improving overall efficiency and computing power. The new protocol also supports pooled mining, enabling miners to share resources. Additionally, the upgrade increased the difficulty of individual block solutions to promote the generation of complete data copies and introduced new pricing measures. Despite initial controversies, these changes were ultimately accepted, and Arweave's market performance improved due to enhanced network performance and stability.

AO Computer: Arweave's Innovative Computing Platform

AO Computer is an important innovation in the Arweave ecosystem, combining the security of blockchain with the efficiency and scalability of cloud computing platforms. By leveraging Arweave's robust infrastructure, AO aims to address the scalability and efficiency challenges in the field of zero-knowledge machine learning (zkML), providing a transparent and verifiable computing system.

AO adopts parallel processing technology, enabling multiple programs to run simultaneously, which greatly improves resource utilization efficiency. This method is similar to multitasking in computers, but on a larger scale, allowing for dynamic resource allocation based on demand, optimizing system performance.

The open data protocol of AO offers a flexible and modular design that facilitates the upgrading and replacement of system components. This design philosophy allows AO to quickly adapt to changes in technological development and market demand.

The AOS system, as the decentralized operating system of AO, allows developers to run command line processes similar to smart contracts. It uses the Lua programming language and supports the creation of blockchain applications compatible with various virtual machines, including the Ethereum Virtual Machine (EVM).

In AO, processes interact frequently with Arweave as autonomous agents, creating an ideal environment for developing efficient data-intensive applications. Unlike traditional smart contract platforms, AO supports the automatic execution of contracts, paving the way for truly autonomous blockchain applications.

The Position of Arweave in the Competitive Landscape

In the decentralized storage space, Arweave's main competitor is Filecoin. The core difference between the two is that Arweave focuses on long-term data storage, while Filecoin aims to disrupt the traditional storage market by providing low-cost temporary storage. Arweave is pioneering a new permanent storage market, whereas Filecoin needs to compete on price with traditional cloud storage providers.

In terms of blockchain performance, Arweave has recently made significant progress. As of late February, Arweave's transaction processing capability has reached over 600 transactions per second, making it one of the highest throughput permissionless blockchains. Considering that the AO computer is still in its early stages, this achievement is particularly remarkable, as its transactions per second (TPS) have already surpassed some well-known blockchain platforms.

Arweave Team, Funding, and Ecosystem

Arweave was founded by Sam Williams and William Jones during their PhD studies at the University of Kent. The project was inspired by a walk in Scotland, combined with Jones's technical insights, ultimately leading to the creation of this blockchain-based permanent data storage platform.

Arweave successfully raised funds through multiple rounds of financing, including pre-seed, seed, community token sales, and private rounds. Notable investment firms such as Coinbase Ventures and Andreessen Horowitz participated in the investment. The project adopts a DAO governance model, ensuring community-led decision-making and voting mechanisms.

The Arweave ecosystem plays an important role in the web3 space. As of the third quarter of 2023, there are over 130 Arweave-based projects in the ecosystem map by Community Labs. The network has processed over 1 billion on-chain transactions, showcasing its growing adoption rate and robust infrastructure.

The Development Prospects of Arweave

Bullish factors:

• The launch of AO has enhanced Arweave's position in the AI field.
• AO provides the capability to access and store Arweave data for decentralized applications.
• The super parallel architecture facilitates the efficient training and deployment of AI models.
• Community expectations for Arweave early adopter airdrops
• AO computers have solved the scalability and efficiency challenges of zkML.
• The transaction volume on the Arweave network has significantly increased in 2023.
• With the comprehensive operation of AO, it is expected that the transaction volume of Arweave will further increase in 2024.

Bearish factors:

• The AO testing phase may expose technical issues.
• The ability of AO to effectively scale AI models on the blockchain has not yet been fully validated.
• The integration of the new AO token with the existing AR token may face challenges.
• Arweave may face challenges in terms of scalability.
• AO computers and their integration with Arweave are still in the early stages.
• Speculation about potential airdrops and token burns may lead to fluctuations in the value of AR tokens.