Making an attempt to worth ether primarily based on the associated fee saving capacities of web3 : ethereum

Hey everybody!

I’m posting right here as a result of this evaluation closely depends on web3 capabilities.

TL;DR: I’m attempting to worth 1 ETH utilizing a easy (and flawed) analogy technique consisting of an estimate of how a lot it might price to function the identical easy service (a raffle) on a standard web site utilizing bank cards and on web3. I find yourself with an estimate of $971 for 1 ETH.

Disclaimer: I don’t personal any crypto and I’m not an expert programmer, I solely have some notions. I’ve adopted cryptocurrencies from afar since I first heard of bitcoin virtually 10 years in the past however there may be MUCH I don’t know, as you’ll realise by studying this put up.

For a brand new know-how to be extensively adopted, it has to both do an analogous job for less expensive, or a a lot better job for comparable prices. Higher job for less expensive is clearly most well-liked however not vital. Worse job is a no-go. Higher job for increased prices is likely to be doable however it’s a tough promote.

The case for web3 resides in its superior capabilities (primarily trustlessness imo) in comparison with a standard web site working with bank cards and « belief me bro » ensures. So a service operating on web3 doesn’t need to be cheaper however it shouldn’t be extensively costlier both.

Right here is my premise: if I can calculate the prices of a operating a service with bank cards (in USD) and calculate the prices of operating an analogous service with web3 (in ETH), I can equate the 2 and discover out the worth of 1 ETH in USD.

I’m conscious that that is no silver bullet as a result of it’s just one instance. One other service would yield totally different outcomes. And it’s all depending on gasoline worth, clearly.

So, right here we go: I selected a easy service: a raffle. Each week, 100 individuals put 0.01 ether every on a wise contract and each week, the supervisor chooses pseudorandomly a winner who will get the entire stability (1 ETH). The contract then resets and is prepared for an additional raffle. I took the code for this sensible contract from the Ethereum Developer’s Information by Stephen Grider and tailored it for the newer model of solidity so that it’ll compile:

pragma solidity ^0.8.7;

contract Lottery {
    deal with public supervisor;
    deal with[] public gamers;

    constructor() public {
        supervisor = msg.sender;
    }

    operate enter() public payable {
        require(msg.worth > .01 ether);

        gamers.push(msg.sender);
    }

    operate random() non-public view returns (uint) {
        return uint(keccak256(abi.encodePacked(block.problem, block.timestamp, gamers)));

    }
    operate pickWinner() public payable restricted {
        uint index = random() % gamers.size;
        deal with payable winner = payable(gamers[index]);
        winner.switch(deal with(this).stability);
        gamers = new deal with[](0);
    }
    modifier restricted(){
        require(msg.sender == supervisor);
        _;
    }
}

Remix tells me that the deposit price is 360 400 gasoline and the execution is 385 065 gasoline. The enter() operate is 48 742 gasoline. The pickWinner() operate price infinite gasoline apparently. So right here I’m making the idea that the price of the pickWinner() operate is solely the execution price of the contract (385 065) minus the price of the enter() operate (48 742) since there are not any different capabilities within the contract. Thus, the price of the pickWinner() operate is 336 323 gasoline.

The annual prices of operating this contract are primarily: the deposit price (as soon as) + the enter() price (100 occasions every week, so 52*100 = 5200 occasions) + the pickWinner() price (as soon as weekly so 52 occasions).

That offers me: 360 400 + 48 742 * 5200 + 336 323 * 52 = 271 307 596 gasoline per 12 months

Now we have to put a worth in ETH to this gasoline. The worth of gasoline modifications daily and clearly, assuming a worth has a big effect on the outcomes. So I’m choosing a worth (30 Gwei per gasoline) that’s decrease than the each day averages of the final two months in order that this evaluation isn’t dismissed on the grounds of hostility in direction of ethereum.

The annual prices of operating this raffle are subsequently: 271 307 596 gasoline * 30 Gwei/gasoline = 8 139 227 880 Gwei = 8.14 ETH

Now, let’s do the identical exercice for a raffle service operating on conventional website hosting and bank cards.

This text tells me that operating an online store by way of WooCommerce will price me round $300 per 12 months plus transaction prices. These prices are 2.9% + 30 cents per transaction.

Assuming a market worth of $2000 per ETH, every week, 100 individuals would wire $20 (0.01 ETH) to the web site and every week, the supervisor would wire $2000 to the winner, assuming that is doable.

The annual transaction prices are subsequently: 100 * 52 * (0.3 + 20 * 0.029) + 52 * (0.3 + 2000 * 0.029) = $7,608

Including the prices of website hosting ($300), we find yourself with an annual price of $7,908.

Now, for the final half, we merely equate 8.14 ETH and $7,908 to finish up with 1 ETH value $918.

I’m posting right here as a result of I do know that this evaluation isn’t good. I don’t fake that I’ve discovered THE approach to worth ether. It’s simply A manner that I discovered cheap. However I’m right here to ask to your assist to make it higher. Because it’s just one explicit case, it’s not value it to go after each element, however did you discover one thing that may massively affect the outcome? Are any of my assumptions utterly unsuitable? What would you modify and what’s the outcome?

I’m right here to study and I’m wanting ahead to your feedback 🙂