Gas fees are the fees required to transact on the Ethereum network and other networks built on top of Ethereum, such as Polygon.
Every transaction made on a blockchain must be verified, recorded in a block, and added to the blockchain by network participants called miners or validators. To compensate them for their work, they are paid rewards in the network’s native token, such as Bitcoin (BTC) or Ether (ETH). The funds come from fees which every user needs to pay in order to transact on the blockchain.
These fees may be called network fees or transaction fees. In Bitcoin, they are called miner’s fees, while in Ethereum, they’re referred to as gas fees.
When a user wants to make a transaction, such as sending money from one wallet address to another, they must confirm the gas fee they are willing to pay. This fee is collected by the validator who adds that transaction to a block. Gas fees on Ethereum are paid in fractional units of ETH called Gwei, which are equivalent to one-billionth of one Ether.
The amount of gas to be paid depends on how complex the transaction is, what networks are involved, and how busy the network is when the transaction is being processed. For instance, a simple transaction like transferring crypto from one Ethereum wallet to another requires lower fees than executing smart contracts or transferring funds to other networks.
During times of peak network usage when too many users are trying to transact at once, high demand and low network capacity drive gas fees up.
Transactions with higher gas fees get prioritized by validators, and when the network is congested, transactions with low gas fees may not be processed at all. Users can choose to pay higher gas fees if they want their transaction to be processed immediately instead of waiting in line.
Another option is to use scaling solutions, sidechains, and alternative blockchain networks instead of transacting on Ethereum to speed up transactions and lower costs. For instance, deploying an NFT via Polygon is cheaper than doing it via Ethereum.
So if you want to save on gas, it’s best to transact when the network is not congested. Otherwise, you will have to wait longer or pay higher fees.
