Our investment thesis about Arweave,the most feasible solution to make decentralised data storage gain wider adoption. Now it’s market share and cap still very small, but it will overtake filecoin’s dominance. Big thanks to @jeremyongws helped editing . egirlcapital.com/portfolio/A…

2:32 AM · Aug 30, 2021

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2) Why we need decentralised data storage? Public chain like Ethereum ain’t design for data storage,the cost to same size of data on it is million times higher than web2 clouding computing & storage service. So normally only BLL and DAL data will stored on the etherum.
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3) and store the majority of files, multimedia and UI layers of data on elsewhere.That means if you bought a jpges, only the transaction of the ownership is recorded on chain, but the actually media file of that jpges is store elsewhere.
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4) It could be on a centralised cloud computing&storage like AWS, which gives cloud providers the power to suspend and censor the contents.
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5) The other alternative is decentralised storage solution, currently dominated by IPFS. Its the first decentralised storage solution,went live in 2014. In order to make it Scalable and commercial use friendly, Protocol Labs introduced Filecoin as its incentive layer.
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6)But the deign of filecoin is highly complex, and it’s hard to compete with web2 cloud service. Reason as followed: 1. Miners needs to stake its native token FILE as part of design, which add more market risks to miners, Further increase the cost for miners.
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7). 2. Miners need provide cryptographic proofs, you know computing cost is a lot more expensive than storage cost. In short miners is not just paying the storage cost, but also need pay for the cost of computing and the file option loss caused by staking FIL.
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8) the high cost of miners will inevitably leads to higher storage cost for users. Also to prevent miners acting as fake user store garbage data for more rewards, the system also introduced KYC. Yes KYC is quite funny in a decentralized platform and also tricky problem.
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9) and because all the contracts signed between miners and users, Filecoin need manage massive amount of contracts, and checking how those contracts are execute in order to reward and punish the miners. That’s highly complex, and complex leads the latency.
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10) Users have to pay miners to retrieve stored data on the network, and this price is determined by the miners,so you might will face the dilemma of paying a high price to retrieve data or migrate data to somewhere else if miners set a very high retrieve price.
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11) so the higher cost and highly complex system make it difficult to offer a competitive price compared to its centralised competitors. So from a users perspective, chose centralised server which is easier, faster still sounds a better options.
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12) other decentralized protocol such as Sia and Storj are all facing the same challenges since they are sharing the same concept, users sign a contract with miners, and protocol checks how miners are execute the contract in order to punish and reward the miners .
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13) keep trying to solve a problem with same solutions is pointless,Take Bitcoin as example,before it came along, everyone is stuck with Byzantine failures,but Byzantine failures is a challenge of a pre-determined solution,not the challenge of a decentralised system itself.
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14)Bitcoin ignored the Byzantine failures and Made it,using a completely different approach, which is much simpler and neat, and from my opinion Arweave did the same in decentralized storage world. You can find more details in the article. I am hungry. Gonna get up.
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