Arweave, the latest storage coin to enter the market, has garnered attention for its innovative approach to meeting storage needs, described as an “intriguing selling point” (Daly, 2024). However, like any new cryptocurrency, the question arises: is it worth the investment? (Arweave investment analysis) Today, we will delve into this inquiry.
What Is Arweave?
Arweave is a storage coin much like Filecoin and Storj. They offer users the chance to rent out their unused hard drive space. The storage coins create decentralised data networks unlike normal storage providers. The coin was founded by Sam Williams and William Jones and runs on a decentralised autonomous network. This network incorporates community voting and decision making.
During the genesis phase in 2018, Arweave minted 55 million out of 66 million AR tokens, which serve as the cryptocurrency of the platform. Users pay a sole upfront fee for permanent storage, utilizing Arweave’s AR tokens for the transaction. The fees will go into a financial endowment and the interest will go towards future storage costs. Furthermore, computers in the network must exclusively accept AR tokens as incentives for offering storage services. Nevertheless, akin to any contract, there’s pesky fine print; in this case, it stipulates that the platform will store the data for roughly 200 years.
How Does Arweave Work?
Arweave consists of two layers:
- Blockweave: Stores data and foundational information within each block, linking the blocks to a “recall block” (Lee, 2023). This unique structure also uses what’s known as a SPoRA mechanism. SPoRA rewards nodes in the network for storing the entire transaction history. If the recall block isn’t accessed, then no reward will be offered.
- Permaweb: A decentralised web that hosts all the Arweave DeApps. Users access the DeApps through multiple gateways, resembling standard websites, with HTTP ensuring seamless internet access.
Strengths Of Arweave
- Future prospects– Recent advancements like Wallet Logs and Fast Find have made Arweave a forerunner to becoming a preferred platform for archiving and decentralised solutions.
- Proof of access-A consensus mechanism that provides AR’s security and performance when in its simplest form. Miners need to prove their eligibility to access a historic site before they can mine
- Accessible environment-Simple interfaces and user-friendly organisation.
World class investors-Arweave investment analysis is backed by well-known venture capital firms like One Block Capital. This gives them access to the best technology and people in the industry making them more robust against failure.
Weaknesses Of Arweave
- Censorship via “Democratic Contact Policy” – The “Democratic Content Policy” of Arweave, alongside the “Democratic Content Policy,” creates potential conflict, as it enables network nodes to issue blacklists on specific content. Consequently, Arweave inadvertently impedes an open economy. If a majority of nodes adopt these blacklists, then content deemed unsuitable could be prevented from appearing on-chain.
- Information not easily available – People have to go through various means like Reddit and Discord to understand AR. There’s no single accessible source that describes the nuances of Arweave.
- Irys controversy – The token reset proposed by Irys may discourage future investors as media controversy could overshadow the advantages of AR.
Conclusion
Arweave investment analysis, holds potential for growth thanks to its unique structures, proof of access mechanism, accessible environment, and strong backing from renowned investors. Nonetheless, the ongoing Irys controversy and the absence of a single authoritative source outlining Arweave’s distinctiveness might dissuade potential investors. Therefore, it is advisable to consider investing in Arweave at a later stage in the year. By then, the controversy may have resolved, and the platform might have demonstrated further superiority over its competitors.