Minimizing Gas Fees
Blockchain is exciting, innovative, and disruptive. It’s empowering a more transparent, secure, and democratized future, as well as new use cases for all major industries. It allows you to take custody of your assets, seamlessly send payments to your loved ones across borders, and even buy or sell your house with just a few clicks. But for all that it is, there’s one thing that blockchain is not: free.
Gas fees explained
Blockchain gas fees are a small amount of cryptocurrency that users must pay in order to make transactions on a blockchain network, sort of like a toll you have to pay to use a road. Gas fees are required to prevent spamming and overload on the network and to compensate the network's miners or validators for the computational work they do to process, validate, and add transactions to the blockchain. Gas fees are usually measured in a denomination of the blockchain's native cryptocurrency, such as Ether for the Ethereum network. The cost of gas can vary depending on network congestion, but in general, the more complex a transaction is, the more gas it requires, and the higher the gas fee, the faster the transaction will be processed.
Blockchain gas fees were first introduced with the Ethereum network in 2015. At the time, gas fees were very low, often just a fraction of a cent. Today, though they vary widely by the state of the network and transaction complexity, gas fees are significantly higher. Ethereum, which is the most popular network for smart contract deployment, is known to have some of the highest gas fees among the major blockchain networks.
The gas problem
As the use of blockchain technology continues to grow, it is becoming increasingly difficult to read data from the blockchain, and even more costly to write to it. Every transaction or smart contract call on the EVM requires a certain amount of gas to be executed, and the more complex the transaction, the higher the gas fee. When it comes to storing data directly on the blockchain, each transaction that adds or updates data requires its own transaction to be processed by the network. This can lead to high gas costs, particularly for systems that need to store or update a large amount of data.
For example, consider a Web3 game that needs to tell a smart contract which gamers recently won the game to be able to pay them out on-chain. If that game has a few million players, it could be passing thousands of wallet addresses to the smart contract each minute. Even on a more affordable blockchain network like Polygon, the gas costs would be outrageous. On Ethereum, they would be completely untenable.
How to minimize gas fees
But what if you could aggregate the data, store and manage it in a decentralized, cryptographically guaranteed data warehouse, and write only the most important data needed to facilitate the rewards back to the chain? All the extra information, like what each player did in the game, can live in the decentralized data warehouse, because it doesn’t need to be secured by the blockchain. The most important data, like who won the round, can be cryptographically verified and written back on-chain. By managing blockchain data in an off-chain, cryptographically guaranteed decentralized data warehouse, you reduce the number of on-chain transactions that are required to access and update the data, which greatly reduces the overall gas costs associated with the system.
Space and Time provides this exact solution—allowing you to store, manage, and run analytics against both on-chain and off-chain data. Space and Time also allows you to join on-chain and off-chain data in a single query and write the result back to a smart contract with cryptographic guarantees that the data is accurate and tamperproof. With a solution like Space and Time, you’re only paying for the most important transactions on-chain. Everything else lives securely off-chain in the decentralized data warehouse and is cryptographically guaranteed.
While blockchain technology has the potential to revolutionize many industries, the gas problem has to be solved in order to make the technology more accessible and practical for everyday use. Solutions such as Space and Time that focus on efficient and cost-effective management of blockchain data, are essential in order to fully realize the potential of this disruptive technology.
This post is also available to read on Medium.