Arweave: The Permanent Storage Experiment

Pros:

• Arweave is the leading protocol/network attempting to offer permanent data storage in a decentralized, censorship resistant way.
• There is an innovative economic model with an endowment pool that’s geared towards long-term sustainability.
• For NFTs and Web3 apps, it offers a strong value proposition for permanently storing/hosting relevant data in an accessible way.
• Even though storage costs are denominated in AR, Arweave has a well thought out pricing mechanism that adjusts the AR/megabyte cost during volatile price swings, without frequently relying on an external oracle. 
• New use cases could be created based on the unique building blocks available such as data provenance, data availability, proof of existence, etc.

Cons:

• Forever is a long time. If users need to pay a higher price today, relative to alternative solutions, because they’re pre-paying future storage costs upfront, then that data truly needs to be available for decades to come for the value proposition to make sense.
• As Arweave sees increased adoption, the amount of data it’s storing will grow exponentially (it’s already at ~8.5 TB). Due to this, miner centralization is a real concern despite valid efforts being made to counteract it (i.e. nodes don’t need to store the entire Weave).
• Sacrifice Mining could be an economic exploit that miners continue profiting from. The risk here is that more unproductive/useless data is added to the Weave over time, increasing its size, as miners attempt to boost their chances of earning block rewards.
• Despite the endowment pool, the sustainability of long-term incentives needs to be considered given the lengthy time horizon Arweave is targeting.
• The promise of permanent storage requires a highly technical solution where multiple complex technologies have to co-exist in unison and support each other to deliver on the promise. Since the solutions offered are still in their infancy, new technical/economic problems may emerge in the future based on how the network evolves. As a pioneer in this field, Arweave has to address these challenges as they come up.

The Permanent Storage Experiment

Arweave is an exciting project. It’s goal is to let users pay once and store data forever (at least ~200 years). While data on the Internet grows exponentially, oftentimes we witness old data getting lost or modified. This is because almost all data is stored by centralized parties whose incentives may be misaligned with users who want to access the data. In a digital era, permanent storage is a novel value proposition which may look very valuable retrospect. Zooming out, data permanence preserves the actual truth in a way that is accessible to anyone and editable by no one. History is no longer written or re-written by the winners but instead everyone has the ability to store their truth, forever.

Information stored in Arweave is backed by continuous incentives that are tamper proof and decentralized. Arweave leverages the immutability enabled by PoW to offer scalable and permanent data storage. It is ambitiously designed for on-chain storage of data larger than the current surface web. However, we already know blockchains in their current form aren’t ideal for storing large amounts of data. The more data that’s stored, the more expensive it becomes to run a full node, which hurts decentralization and thus resiliency. So how can Arweave promise this? To understand it better, let’s first dive into the issue at hand.

PoW chains require full nodes to store all blocks to autonomously verify. Over time, as more blocks get added to the chain, t