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2 minute read / Oct 27, 2023 / web3 /trends /data analysis /

Gas Gas Revolution

In 2021, Amazon announced they had reduced prices on Amazon Web Services 107 times since launch.

This drop in prices has grown AWS into a $90b revenue business in 17 years. As storage & compute became less expensive, the economic viability of new use cases became increasingly apparent & developers built software on the cloud.

The same cost-reduction phenomenon is occurring with blockchains, though it’s not nearly as well publicized.

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The cost to save data to a blockchain is called gas. In 2021, at the peak, the average quarterly gas fee on Ethereum reached about $37. To send a file (an NFT perhaps) to a friend, cost the user $37.

Some days that figure soared about $70.

At those prices, not many transactions are economically viable. Compare that to AWS’ managed database, Aurora, which charges $0.0000002 per request. (I’m ignoring the storage cost here).

However, over the last few years, we have seen a meaningful reduction in the cost per transaction. First, Ethereum overall has fallen from $37 to $2.

Newer technologies called layer 2s, which are faster, less expensive databases running atop Ethereum have further cut the price to $0.15 for Optimism & $0.08 for Arbitrum.

Some newer blockchain databases like Sui have further pushed that cost to $0.0019 as of this writing.

Database Cost per Transaction in $ Cost Multiple Relative to AWS
AWS Aurora 0.0000002 1
Ethereum Peak 37 185m
Ethereum Today 2.67 13.4m
Optimism 0.15 750k
Arbitrum 0.08 400k
Sui 0.0019 9.5k

The trend is evident & inexorable. The cost to store data on block chains has fallen five orders of magnitude in the last 3 years.

It’s a sort of inverse Moore’s Law - let’s call it Eroom’s Law for fun.

As Eroom’s law continues to progress, I expect we’ll see the cost to store data on a blockchain approach that of a classic database like Aurora. More (e)room for data for less dollars.

AWS Aurora has benefitted from efficiency gains since 1986 - 37 years of development. Ethereum, the oldest blockchain database listed, turned 8 this year.

Given another few years at this pace of innovation, it’s not unreasonable to expect blockchains to be cost-competitive to classical databases.

More than that, they offer different types of promises to developers for data sovereignty, mathematical proofs, resiliency, & resistance to attack.

It’s the gas gas revolution. As the gas costs fall, more applications will be built on blockchains.


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