All truly decentralized blockchains have an auctioning mechanism for miners to determine the fees, which they want in order to process transactions. This results in wildly unpredictable and volatile network fees, which are a major blocker for mass adoption.
A real life example that displays how much of a problem this unpredictability can cause for an actual business is a recent analysis on one of our LockTrip bookings smart contracts that we had designed for our travel application. Just two examples of the exact same operation happening over a two-week time span, result in a cost difference of +1000%.
July 16 2018https://etherscan.io/tx/0x6dd24031fa97cdaeebb3bc7bc48146be201f098f8a638463a2bd90f8acecd2d0- Standard GWEI settings across the network is 10 and the cost for booking is $2.84
July 03 2018 –https://etherscan.io/tx/0xfa28e0513cd89199675cf8d5068d4e8fb198d49ce3c2d12edbcaf9caa15657d7- Standard GWEI settings across the network is 93 and cost for booking is $23.86
At the same time, the daily network capacity remains relatively stable.
On top of the unpredictable GAS price, the Ethereum network fees are currently bound to the underlying Ethereum cryptocurrency price without any reference to fiat values, which practically means that even if GAS price (measured in GWEI) remains unchanged, in case of an extreme rise of ETH price, the network fee will again significantly increase. This flaw in design pretty much limits the upward potential of Ethereum, since the more the ETH price increases, the more expensive it becomes to use the network for all Ethereum network participants.
It is evident that as a business developer, it is impossible to scale when there is absolutely no information on what our future transactions will cost.
No mainstream blockchain developer has addressed the possibility to relate the network fee to a fiat value. The current combination of unpredictable variables, makes it near impossible for a real world business to operate effectively on a high transaction scale.
In contrast, in the conventional business world, the majority of transactions are subjected to fixed fees (e.g. Visa, Mastercard etc). If blockchain aims for mass adoption, the underlying fees need to be bound to fiat equivalent regardless of the underlying cryptocurrency value in order to eliminate the burden of price volatility on market participants that engage in transactions. This could also significantly increase the upside potential of the underlying coin.