MoleEdu Web3 Series Open Class Review: Storage

Author: Moledao

The Web3 series course co-hosted by Moledao and OGBC officially started on January 16, 2023! The first week is Infrastructure Week, covering the basics of blockchain, Ethereum, Layer 2, Layer 0, and storage.
Today, let's review the "Storage" course by Mentor Allen on January 20, 2023! The course recording has been uploaded to Moledao's Bilibili: Week 1: Infrastructure Week | Storage

Now, let's learn from the notes of the "Storage" course!
Mentor Introduction
Mentor Allen is the former CMO of a leading mining machine company. Co-founder of Extend Labs, Permadao ambassador, senior miner, and storage service provider. He has participated in mining operations for BTC, ETH, AR, FIL, etc. He has in-depth research on mining and the distributed storage track.

Learning Outcomes

In this class, Mentor Allen explained the value, vision, and advantages of distributed storage technology. He also introduced two leading projects in distributed storage: Arweave and Filecoin. Finally, he listed the project ecosystem of Arweave.

01 The Technical Value and Vision of Distributed Storage

Physical computers primarily focus on storage and computation; in the internet era, the most important aspects are information storage, computation, and information distribution; in the mobile internet era, big data and artificial intelligence have developed; and blockchain technology relies on distributed ledgers (Bitcoin), distributed computing (Ethereum), and distributed storage (AR, FIL).
1.1 Structural Differences Between Web 2.0 and Web 3.0

• Blockchain 1.0: Represented by Bitcoin, virtual currency that achieves monetary freedom. It is currently the best application of blockchain technology.

• Blockchain 2.0: Represented by Ethereum, a smart contract platform that solves equity issues.

• Blockchain 3.0: Represented by distributed storage, which ensures data ownership and permanent storage.

1.2 The Essence of Cryptocurrency is a Decentralized Ledger

• The essence of currency: a unit of account

• Barter: the beginning of accounting

• Gold and silver with gold notes and silver notes; at this time, due to the good liquidity of gold and silver, gold notes and silver notes began to exist in the form of ledgers.

• Central banks represented by the Federal Reserve

• The essence of cryptocurrency: a decentralized ledger system

• The essence of cross-chain: "ledger alignment" technology between decentralized ledger systems

• A new paradigm: on-chain storage reconciliation model. As blockchain develops, on-chain data will increase. SocialFi, blockchain games, etc., require a large amount of storage (because this information has value). Cross-chain alone is not enough.

• The transition from on-chain computation reconciliation model to on-chain storage reconciliation model (everpay)

• Blockchain is downward compatible with L0

1.3 Comparison of Blockchain Storage Solutions

Separating non-core data from the main chain and storing it in a DSN (Decentralized Storage Network) has become a mainstream solution to solve scalability, improve interoperability, and protect privacy.
The off-chain storage layer will eventually become an important infrastructure in the Web3 ecosystem and solve any data storage issues at the protocol and operational layers through hot storage and cold storage.
Currently, the most challenging aspect of the impossible triangle is achieving both decentralization and high performance. However, it is indeed possible to achieve both. In the future, the scalability issue in the "impossible triangle" can be solved by completely separating the storage layer while maintaining interoperability and improving the efficiency of data computation, invocation, and pushing through middleware, APIs, and other services built on the cold storage layer.
02 Advantages of Distributed Storage

Advantage 1: Ensures permanent storage of data and immutability

Centralized storage generally involves uploading and downloading as a whole. If the company providing storage encounters problems, the stored data may be lost.
However, decentralized storage slices user data and uploads it to various nodes, allowing multiple nodes to merge and download. This way, even if some nodes encounter issues, the data can still be well preserved.

Advantage 2: Efficiency improvement of nearly 60 times

Advantage 3: Cost reduction

The cost of using Alibaba Cloud: 0.35 yuan/GB/year. Douyin pays 4 billion annually for this. With the rise of 5G and big data, user storage preferences have shifted from images to videos, significantly increasing the required storage space and costs.

Advantage 4: Fragmented processing ensures data privacy and security

In centralized storage, sensitive personal data, such as various records on Trip.com and home addresses in Meituan takeout, are severely leaked. Distributed storage saves data in slices, better protecting user privacy.

Due to these advantages, distributed storage has become the underlying data protocol for many world-class projects, including:

• Used by the German Aerospace Center for telemetry data storage

• All confidential documents in the U.S. Apollo moon landing program were uploaded and stored using distributed storage

• The world's second-largest Firefox browser supports distributed storage

• The Library of Congress in the U.S. permanently preserves historical data

• Companies like Alexandria, D.Tube, etc.

03 Leading Projects: Arweave & Filecoin

3.1 Arweave | Permanent Storage, Decentralized 3.0 Era

Arweave is a typical representative; it is not entirely structured as a blockchain, and the network does not require nodes to store every block. However, its SPoRA consensus mechanism requires nodes to access historical blocks randomly set by the network to produce blocks. To increase the probability of block production, nodes will store more historical blocks and maintain permanent storage.

3.2 Filecoin | Temporary File Storage, Decentralized Storage

Filecoin is a typical representative of storage based on P2P networks. Users' files are stored in nodes of the P2P network (IPFS) rather than on the blockchain. These P2P nodes are also nodes of the Filecoin blockchain network, relying on replication proofs (PoRep) to represent the storage of a specified number of copies and space-time proofs (PoST) to represent the continuous storage of data to prove that they have completed the storage task. This means that nodes on Filecoin need to continuously provide proofs to demonstrate that the data is properly stored.

3.3 Comparison

At this stage, the different technical architectures adopted by Filecoin and Arweave also lead to differences in functionality. According to a research report by Fundamental Labs[ 3 ], we define the evaluation framework for functionality as: flexibility of storage range, permanence of storage, redundancy avoidance capability, incentive for data storage, universality of stored data, and data availability.
To some extent, Arweave and Filecoin are complementary solutions:

Arweave focuses more on the permanence and stability of data storage, making it more suitable for metadata and historical data;
Filecoin can provide more flexible storage solutions (storage time, type), making it more suitable for personal and non-critical data storage.
Arweave's permanent storage can provide a more reliable solution for NFT or social applications. Filecoin has advantages in miner networks and storage costs. It is worth noting that Filecoin previously had a lot of garbage data, while Arweave's data is mostly real and valid because users need to pay before they can store.

3.4 Distributed Storage DAPPs (Decentralized Applications)

04 Examples of Arweave Project Ecosystem

4.1 Everpay Project:

Everpay project

Everpay can solve the problem of insufficient TPS in blockchain payments and can be understood as a decentralized Alipay.

Transfer Process: A transfers to B, and after both A and B confirm that the transfer is correct, the transaction record is recorded on the Arweave chain. The transaction process is computed offline, only requiring confirmation from both A and B. It only uses distributed storage without utilizing distributed computation, achieving tens of millions of TDS per second. The ledger exists on the Arweave network, so it can be permanently stored and is immutable. The algorithm is open-source and also stored on the Arweave network; if there are disputes regarding the transaction, the algorithm and transaction can be directly downloaded from the Arweave network for verification. Wallets, decentralized exchanges, DAOs, NFTs, and dApps can be developed on this payment protocol.

4.2 Permaswap Project

Permaswap project
is an exchange protocol built on Everpay, where anyone can build an exchange on this protocol, and even banks can connect.
Utilizing the Arweave network, users can keep their assets in their wallets while achieving trading speeds comparable to centralized exchanges.

4.3 Echo Project

Echo project

A decentralized comment plugin. If comments are not deleted after a certain period, the messages will be permanently stored on the Arweave network, free from interference from any centralized institution. In the future, many projects in GameFi, NFTs, or the transition from Web2 to Web3 can refer to this system for data rights confirmation.

4.4 PermaDAO

Is a co-built DAO for Arweave and Arweave projects, where everyone can learn a lot about storage-related projects and knowledge.
05 Predictions for Industry Development Directions in 2023

• The real demand for on-chain storage is rapidly growing, and the storage track is ushering in substantial development;

• Separating non-core data from the main chain and storing it in a DSN (Decentralized Storage Network) has become a mainstream solution to solve scalability, improve interoperability, and protect privacy;

• L1 expanded storage networks can provide new solutions with higher interoperability than DSN, but still need time to verify the model; Arweave

• Future decentralized storage scenarios will include complete interoperability, data availability, security, and user/developer-friendly off-chain computation provided through middleware and APIs; Arweave

• The next step in the storage track will see opportunities for data-type public chains, which will also become the underlying layer of the entire blockchain, the existence of L0.

06 Acknowledgments

Thanks to the following organizations for their support of this public welfare course!
Sponsor Support:
One Global Blockchain Centre (OGBC)
https://www.ogbc.com/
OGBC is a leading incubator for Web 3.0, collaborating with emerging cryptocurrency startups to build the infrastructure of the future. By leveraging OGBC's expertise, network, and resources in the cryptocurrency field, companies and projects can maximize their potential and strive to develop innovative and valuable solutions for an increasing number of users in the blockchain industry.

Other Partner Support:

07 About Moledao

MoleDAO is a blockchain developer community for all blockchain enthusiasts to learn about the latest developments in blockchain and grow with the help of experienced blockchain pioneers and innovators, contributing more innovative ideas to build the Web 3 ecosystem.
Our aim is to bring blockchain concepts to everyone and develop the blockchain ecosystem by building a community for blockchain enthusiasts to communicate, providing support for blockchain projects, hosting a series of global hackathons, helping project talent match, and offering project sponsorship and guidance.
Our vision is to become a well-curated one-stop blockchain ecosystem. Whether you are a blockchain enthusiast, a blockchain developer, an institution, or an investor, you can find a suitable position for yourself at Moledao.