1. What is Arweave (AR) Coin?

Similar to Filecoin, Arweave is a decentralized storage project.

Web2 storage is centralized, whether it’s cloud storage or regular VPS, as it requires a server provider and the data is stored on their servers. Although widely used cloud storage applications like AWS exist, they still rely on a centralized storage model. This contradicts the decentralized nature of blockchain technology and also poses the risk of data loss. This is particularly critical for the storage of NFTs.

Currently, NFT storage involves storing the files on centralized servers. For example, the NFT World Women stores its images on AWS servers. On Ethereum, only a few lines of code representing NFT attributes and smart contract information are stored. If the original image of an NFT is lost, the information stored in the smart contract becomes useless. This is the biggest security pain point for NFTs.

The primary application of Arweave is NFT storage.

2. What are the main differences between Arweave and Filecoin?

Filecoin is the leading decentralized storage project, ranked 31 in terms of market capitalization on BingX Market Cap, with a market value of $1.88 billion. In contrast, the market value of AR tokens is only $385 million, which is about 1/600th of Filecoin’s value. Since its establishment in 2022, AR has often been compared to FIL tokens.

One of the differences is the payment method: Arweave adopts a one-time payment for lifetime usage, while Filecoin requires payment based on time and the amount of blockchain storage occupied. Therefore, for NFT storage, AR is more cost-effective.

They also differ in their storage methods: Arweave stores data on the blockchain, making it immutable, while Filecoin stores data on various distributed hard drives. So, AR is a blockchain that contains complete and immutable information, while Filecoin is a token without any storage information written on it. In reality, Filecoin functions more like cloud storage, where idle hard drives are rented out in exchange for Filecoin tokens.

Due to Arweave’s blockchain storage model, blocks continue to grow in size as more files are stored. Currently, Arweave’s blocks occupy 110TB of space. This makes Arweave’s storage highly targeted, focusing on storing NFTs and the latest BRC-20 metadata.

Filecoin, on the other hand, combines the FIL blockchain with the distributed storage system IPFS. It functions more as a competitor to Ethereum and requires an ecosystem to support it. This is why Filecoin’s price increased after announcing that FIL tokens would have smart contract capabilities.

3. Background of Arweave and Filecoin teams

Filecoin was established earlier, in 2014, and was designed by Juan Benet at Protocol Labs. Being established early on, similar to Bitcoin, many mining companies/teams with Chinese backgrounds are involved.

Arweave was founded later, and its founder, Sam Williams, holds a Ph.D. from Kent State University in the United States. The team has a strong technical background and expertise. Due to its niche storage offering and relatively higher prices, the main customers of Arweave are Solana users. NFTs on the Solana chain are stored using the AR chain.

4. Arweave Mining

Mining AR is significantly different from Filecoin. In Filecoin mining, you need to hold FIL tokens, and if the provided node doesn’t have enough online time, penalties will be applied.

AR mining, on the other hand, doesn’t require holding any AR tokens, and unlike other mining methods, it doesn’t involve downloading the entire blockchain. Mining rewards are obtained through the verification of blocks, so the more blocks downloaded to the local hard drive, the higher the chances of obtaining verification. Currently, the total size of the blocks is 110TB, and the recommended official hard drive read/write speed is 200MB/s. Going beyond this speed won’t result in higher rewards. Of course, being too slow is also not ideal. This means that an ordinary PC with a large enough hard drive capacity can participate in mining.

Ideally, downloading all the blocks for mining is best, and if only 5TB is downloaded, the chances of receiving rewards are only 1/22.

For the investment of a 110TB hard drive, it is recommended to use a 7200 RPM HDD. While using an SSD can achieve a stable speed of 200MB/s or even higher, the cost of a 110TB SSD is very high. Additionally, the official guidelines make it clear that even if the speed is faster, with an SSD reaching 300MB/s, it won’t increase the rewards.

5. Price Prediction for Arweave: Will it be the next 100x coin?

Decentralized storage is an area that is severely undervalued despite its tremendous prospects and demand. This is evident with Binance Coin (BNB) introducing BNB Greenfield, a decentralized storage solution on-chain. The competitiveness of decentralized storage among all current projects is relatively low. With the surge of Web3 during a bull market, the token price of decentralized storage projects is expected to skyrocket.

The issuance of AR tokens took place during the bear market, experiencing a general market decline and inventory accumulation. In 2022, its main supporter was Solana, whose SOL token witnessed a price drop from its high of $120. As a result, the AR token also declined from its price of $91 to around $5 currently.

In the short term, due to the overall market funds being allocated to the purchase of BTC and ETH, the price of AR is not expected to experience significant growth in 2023. However, in 2024, with the positive impact of Bitcoin halving, the cessation of interest rate hikes, and the resurgence of NFTs, the price of ARB is anticipated to rise. There is a certain probability that it could become the next 100x coin.

Disclaimer:

The above analysis does not constitute any investment advice. Users are encouraged to make their own decisions and conduct thorough research (DYOR).

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