What is Cost per Thousand (CPT) transactions?
A unit or metric which can be used to objectively compare the cost of processing 1,000 transactions across blockchain protocols & cloud computing networks, including legacy networks such as AWS, Google Cloud & Microsoft Azure.
Why choose 1000 transactions?
In internet advertising, transactions are priced in CPM (cost per thousand impressions). STORE borrowed from this model and invented an industry standard on how to quantify the cost of cloud computing - whether it's decentralized computing protocols like STORE and Ethereum or centralized cloud compute like Amazon AWS.
Why is CPT computed?
From the point of view of senders (developers/users) and miners because in current legacy networks;
- 1.Senders bear the cost of submitting transactions in the form of fees and
- 2.Miners bear the cost in the form of infrastructure to process transactions
CPT should be the primary variable in any network’s economic model as it influences both the cost to end users and profitability of miners.
Why is this important?
Having a good CPT metric for the network is important as it provides greater transparency and reliability not only for miners but also for developers, additionally;
- 1.Miner profitability is critical to the long term sustainability of any blockchain network.
- 2.Network usage and uptake is affected by transaction fees - low or no transaction fees attract users and developers
- 3.All blockchain networks assess a “decentralization premium” - that is - the cost overhead due to decentralization (a systematic approach to replace centralized trust). The cost overhead must not be too high compared to centralized cloud services.