Cost Predictability: The Missing Analysis For Running Dapps

Connor D | January 13, 2022

Last updated on February 5th, 2022

Cost predictability is a missing link for blockchain adoption and a topic that needs more discussion in the crypto space. When a business creates an application on a blockchain, there are many considerations that impact the decision on which platform to use. Companies are likely to look for low costs, fast transactions, and formal verification. However, businesses should also consider cost predictability. While this consideration impacts businesses most, considering price predictability can also be valuable for investors by considering which platforms are likely to attract applications. 

 

What is Cost Predictability?

Cost Predictability is a measurement of how accurately a business can forecast costs to run an application. With increasing transaction costs on the popular blockchain Ethereum and congestion in throughput, it is more relevant than ever for businesses and users alike to consider cost predictability. Currently, there is no way to accurately predict running costs on a day-to-day basis on public blockchains.

 

The Problem With Cost Predictability

On public blockchains, the token price fluctuates every minute of every day, constantly altering the cost of running a dapp.  As a business, you want your cost to be predictable in that it will be the same today as yesterday, and tomorrow, and the day after, and the week after, and the month after, and so on. While other factors can impact the cost of running an application, the one common element shared that can be compared across all smart contract platforms is token price. As long as token prices are volatile, cost prediction is unfortunately impossible.

Many public Blockchains will end up having transactions that are both fast and low-cost. Some blockchains will have other advantages for applications, such as Cardano, which formally verifies an application’s code. While some blockchains such as VeChain are exploring ways to combat transaction volatility, no public decentralised blockchain has implemented a way to predict daily costs with any degree of accuracy. Whichever smart contract platform can solve this problem and offer cost predictably is likely to gain mass adoption. Keep your eyes open. 

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