# Computation and Storage Costs

The Internet Computer requires computation operations and storage to be supported by cycles. Cycles are generated from the conversion of Internet Computer (ICP) utility tokens.

## The Role of the Network Nervous System (NNS) in Defining Costs​

The Internet Computer is a decentralized public utility, controlled by the NNS –– the network’s open, algorithmic governance system. The NNS fundamentally controls how many cycles are required for low-level computation actions for computation and storage. The number of cycles needed for individual computations will vary based on a number of factors considered by the NNS, including proposals from the community.

## Details: Cost of Compute and Storage Transactions on the Internet Computer​

Canister smart contract computations running on the Internet Computer blockchain are fueled by “cycles”, which play a similar role to “gas” on Ethereum. There are several major differences however. One of the most fundamental differences is that Ethereum leverages “user pays” and the Internet Computer and “smart contract pays” (sometimes called “reverse gas”) model. Whereas the Ethereum blockchain requires end users to send payments for the gas smart contracts consume with every transaction, on the Internet Computer, Canister smart contracts are pre-charged with cycles, such that contracts effectively pay for their own computation - freeing users from the responsibility.

See below for details on the cost of compute and storage transactions on the Internet Computer as of August 29, 2022. A thorough example how the cost of running a canister is computed can be found here.

TransactionDescriptionAll Application Subnets
Canister CreatedFor creating canisters on a subnet100,000,000,000
Compute Percent Allocated Per SecondFor each percent of the reserved compute allocation (a scarce resource).10,000,000
Update Message ExecutionFor every update message executed590,000
Ten Update Instructions ExecutionFor every 10 instructions executed when executing update type messages4
Xnet CallFor every inter-canister call performed (includes the cost for sending the request and receiving the response)260,000
Xnet Byte TransmissionFor every byte sent in an inter-canister call (for bytes sent in the request and response)1,000
Ingress Message ReceptionFor every ingress message received1,200,000
Ingress Byte ReceptionFor every byte received in an ingress message2,000
GB Storage Per SecondFor storing a GB of data per second127,000

Note: System API calls are just like normal function calls from the WebAssembly stand point. The number of instructions each call takes depends on the work done.

Cycles Cost per Transaction (as of August 29, 2022)

The $USD cost for transactions below is based on the above cycle costs. 1 XDR is equal to 1 Trillion cycles. As of August 29, 2022, the exchange rate for 1 XDR =$1.301940. The exchange rate for USD/XDR may vary and it will impact the conversion rate. For XDR exchange rates please visit: https://www.imf.org/external/np/fin/data/rms_sdrv.aspx

To derive the estimated GB Storage per month, we assume a 30 day month.

TransactionDescriptionAll Application Subnets
Canister CreatedFor creating canisters on a subnet$0.130194 Compute Percent Allocated Per SecondFor each percent of the reserved compute allocation (a scarce resource).$0.0000130194
Update Message ExecutionFor every update message executed$0.0000007681446 Ten Update Instructions ExecutionFor every 10 instructions executed when executing update type messages$0.000000000005208
Xnet CallFor every inter-canister call performed (includes the cost for sending the request and receiving the response)$0.0000003385044 Xnet Byte TransmissionFor every byte sent in an inter-canister call (for bytes sent in the request and response)$0.00000000130194
Ingress Message ReceptionFor every ingress message received$0.000001562328 Ingress Byte ReceptionFor every byte received in an ingress message$0.00000000260388
GB Storage Per SecondFor storing a GB of data per second$0.00000016534638 Cost per Transaction in$USD (as of August 29, 2022)

Assuming a 30 day month —

GB Storage Per MonthFor storing a GB of data per month\$0.429