The New Era of Web3: The Revolution of Decentralized Storage and Computing

The next generation of the internet, Web3, will be built on the three pillars of consensus, storage, and computation. Blockchain technology has initiated a Decentralization revolution, and Web3 will expand this concept to the entire internet domain.

In terms of Decentralization storage, peer-to-peer networks have created a global, trustless, and immutable data storage system. As a pioneer in this field, Arweave offers a cost-effective solution that ensures the permanence, immutability, and censorship-resistance of data, meeting the growing demand for NFTs and decentralized applications.

According to predictions by the International Data Corporation, the global data generation volume is expected to reach approximately 221,000 exabytes (EB) by 2026. For easier understanding, 1 EB is equal 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 vast scale of data highlights the enormous market potential of decentralized storage protocols like Arweave.

In addition to innovations in the storage field, Arweave is also actively involved in the field of Decentralization computing. Its AO computer is a "super-parallel" computing platform designed to seamlessly integrate large AI models with smart contracts. AO combines the performance of high-speed blockchain with the verifiability required by decentralized projects.

It is predicted that the global AI market size will grow to approximately $257.516 billion by 2032, with an average annual growth rate of 19%. Decentralization AI addresses the issues of transparency and control in machine learning, helping to build a fair and open AI ecosystem while protecting intellectual property and personal data privacy. Arweave's advancements in decentralized storage and computing place it at the forefront of the Web3 revolution, meeting critical industry demands and expanding its market potential.

Overview of Arweave Protocol

Arweave is an innovative Decentralization storage protocol that achieves permanent data storage through a one-time payment. The protocol consists of two core components: blockweave and permaweb.

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

Permaweb is a human-computer interaction layer built on top of blockweave, mimicking the structure of the World Wide Web. Unlike traditional web pages, the content on the permaweb cannot be changed once uploaded, ensuring the immutability of websites and decentralized applications.

Arweave also supports smart contract functionality through its SmartWeave platform. Unlike traditional blockchains like Ethereum, SmartWeave only computes contract states locally, thereby improving efficiency and scalability.

AR is the native token of the Arweave network, used to pay for storage fees. Most of these fees go into the storage donation fund, which aims to cover the costs of storage and network maintenance in the long term. Historical data shows that the annual average decline rate of storage costs is 30.57%, which provides strong support for the long-term sustainability of the protocol.

Miners in the Arweave network are rewarded through a combination of transaction fees, inflationary token issuance, and donations. The tokenomics model includes an initial issuance of 55 million AR and an inflationary issuance of 11 million AR, with a total circulation ultimately reaching 66 million AR. The protocol adopts a fixed supply strategy and does not have a token burn mechanism.

Arweave Network Upgrade and AO Computer

At the end of 2023, the Arweave community experienced a controversy regarding a potential fork. After clarification and communication, the community re-united and successfully completed an important network upgrade on March 26, 2024. This upgrade introduced a coordinated mining mechanism, allowing multiple nodes to work together, improving network efficiency and computing power. At the same time, support for mining pools was added, enabling miners to share resources. The upgrade also adjusted the block generation difficulty and pricing mechanism to optimize network performance and stability.

AO Computer is an important innovation in the Arweave ecosystem, combining the security of blockchain with the efficiency and scalability of cloud computing platforms. AO utilizes parallel processing technology to run a large number of programs simultaneously, significantly improving resource utilization efficiency. Its modular design allows for easy upgrades and component replacements, providing flexibility for future development.

The AOS system, as AO's Decentralization operating system, 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. The uniqueness of AO lies in its ability to allow contracts to execute autonomously, without user triggers, paving the way for truly autonomous blockchain applications.

Market Competition and Performance Comparison

In the field of decentralized storage, Filecoin is a major competitor of Arweave. The core difference between the two is that Arweave focuses on long-term data storage, while Filecoin aims to disrupt the traditional cloud storage market with low-cost temporary storage services. In the coming years, the competitive landscape between these two models is worth paying attention to.

In terms of performance, Arweave has recently made significant breakthroughs. By the end of February, the network achieved a processing capacity of over 600 transactions per second, making it one of the highest throughput open blockchains. Considering that the AO computer is still in its early stages, this achievement is particularly noteworthy, even surpassing some well-known high-performance blockchains.

Team Background and Ecosystem Development

Arweave was co-founded by Sam Williams and William Jones during their PhD studies at the University of Kent in the UK. The inspiration for the project came from a trip to Scotland and Jones's technical insights, ultimately leading to the creation of this blockchain-based permanent data storage platform.

Since its establishment, Arweave has successfully raised considerable funds through multiple rounds of financing, including $8.7 million before the seed round, $5 million in the seed round, and subsequent community token sales and private placements. Well-known investment firms such as Coinbase Ventures and Andreessen Horowitz have participated. The project adopts a DAO governance model, ensuring a community-led decision-making mechanism.

The Arweave ecosystem is thriving in the Web3 space. As of the third quarter of 2023, over 130 projects have been built on Arweave. The network has processed over 1 billion on-chain transactions, demonstrating its increasing adoption rate and robust infrastructure support.

Development Prospects Analysis

favorable factor

• The launch of AO has elevated Arweave's status in the AI field and expanded the possibilities for machine learning and AI integration.
• The ultra-parallel architecture facilitates the efficient training and deployment of AI models, providing an ideal platform for the development of DeFi applications.
• AO computing has addressed the scalability and efficiency challenges of zero-knowledge machine learning.
• The transaction volume of the Arweave network significantly increased in 2023, processing about 100 million transactions per month.
• With the performance improvement of AO and its applications in AI and ML, the transaction volume of Arweave is expected to further increase in 2024.

potential risks

• The AO testing phase may expose technical vulnerabilities, affecting progress.
• The capability of AO to expand AI models on the blockchain remains to be verified.
• The integration of old and new tokens may face challenges, increasing uncertainty.
• Despite the latest developments, Arweave may still face challenges in terms of scalability.
• The integration of AO computing with Arweave is in its early stages and may encounter unexpected technical and operational issues.

Overall, Arweave occupies an important position at the forefront of the integration of Web3 and AI through its innovative storage solutions and the AO computer project. However, there are still uncertainties regarding technical implementation and market acceptance, requiring continuous attention to its development dynamics.