Omar Metwally, MD Analog Labs 19 November 2018
It was a bright cold day in April, and the clocks were striking thirteen. Winston Smith, his chin nuzzled into his breast in an effort to escape the vile wind, slipped quickly through the glass doors of Victory Mansions, though not quickly enough to prevent a swirl of gritty dust from entering along with him.
Opening paragraph of George Orwell's Nineteen Eighty-Four. 306 characters, including spaces.
I did some back-of-the-napkin math to calculate how much it would cost today to upload George Orwell’s novel Ninteen Eighty-Four to the Ethereum blockchain.
To upload the opening paragraph using this Ethereum contract (there are much more efficient ways to accomplish this using Solidity), the transaction would cost 290697 gas under current network conditions. If the entire 576,789-character novel were uploaded in the same manner, it would cost 576789 * 290697 / 306 = 54743895.20588 gas. Gas is currently about 2.2 * 10^9 wei .
(54743895.20588 gas) * (2.2 * 10^9 wei / 1 gas) * (1 Ether / 10^18 wei) = 1.2 Ether.
The carat symbol (X^Y) here indicates “X to the power of Y”.
In this manner, Orwell’s Ninteen Eighty-Four would cost 1.2 Ether to upload to the Ethereum blockchain, where it would be permanently and publicly available, served by more than 10,000 nodes.
If Ether were regarded in terms of its utility rather than as a speculative or financial instrument, there would likely be much less price lability, assuming society’s utility for a technology in general changes at a much slower rate than a market’s enthusiasm for securities and commodities. For instance, the cost of electricity in the residential setting varied from an average of 11.26 cents per kWh in 2008 to 12.89 cents per kWh from 2007 to 2017 . Contrast this with the cost of Ether ranging from less than $1 in 2015 to more than $1,400 in early 2018.
How much does Ether really cost? A dollar? $100? $1000?
One way to begin answering this question is to study current market rates of cloud hosting services [3, 4]. Google offers a 2TB standard storage tier at $0.000274 per hour, and Amazon’s standard EC2 instances can range from $94 to $2,367 annually. A direct comparison with the cost of uploading Orwell’s novel is inaccurate because:
- Information uploaded to the blockchain is permanent as long as a majority of nodes continue perpetuating the blockchain. Cloud hosting contracts are only as permanent as a recurring credit card payment, a company’s existence, and its willingness to serve data.
- Google and Amazon cloud instance capacity is much larger than the 590kb size of Nineteen Eighty-Four as a text file.
- Cloud hosting companies charge for bandwidth, whereas there are no blockchain transaction costs associated with downloading blockchain data
- Conversely, running blockchain clients consumes a lot of bandwidth
- A large, distributed network’s downtime is virtually zero and is theoretically much more resistant to hacking
I offer file storage as an imperfect thought experiment because a significant part of what consumers pay for when purchasing a smart phone is the ability to store large amounts of media, access and share these data. This thought experiment is only a starting point to answering the question of how much one Ether actually costs.
It took decades for the internet’s value to manifest, which today often takes the form of profiling users and using this information to sell digital ads. As one of my academically-minded siblings keenly points out, however, one important difference between the origins of the internet as we know it today and blockchain networks whose tokens are traded on exchanges is that the internet was built in a more farsighted manner without the objective of making money for speculators. ARAPANET, the precursor to the modern internet, initially ran on four Interface Message Processors (IMPs) at UC Santa Barbara, Stanford, the University of Utah, and UC Los Angles . Of course, the internet has changed dramatically since its early years, and technology in general is constantly evolving under the pressures of regulation and free markets.
Crypto markets poisoned blockchain research by muddling networking protocols and stake in open source projects with financial speculation. On one hand, capital is an important element of many large endeavors. On the other hand, skyrocketing prices and price lability can breed greed, resentment, and hinder the ability of programmers, consumers, and researchers to actually use networking protocols. The lower the price of crypto, the cheaper the transactions on the network and the more accessible the protocol is to the average consumer.
So how much does Ether really cost? A dollar? $100? $1000?
One step toward answering this complicated question is to ask: how much would you pay to perpetually host George Orwell’s Nineteen Eighty-Four (or another 590kb text file or image)?