What Is Gas?

Imagine you are logged on about to make your first transaction on the Ethereum Blockchain. You get all the way to the final step but, right before you confirm your transaction, you notice a $200 fee has been added to the total. Confused, you check the internet for answers and find numerous articles reporting surging “gas fees”. You decide to call it a day and check back tomorrow, upset that you failed to bag your pet rock NFT. The following day, you log on only to find that the gas fee has dropped inexplicably to $20.

So what is this fee, who is it for and why does it fluctuate so drastically?

What is a gas fee?

Every transaction carried out on the Ethereum Blockchain requires users to pay a “gas fee”. In simple terms the gas fee is a sum of money that is paid to process and validate the transactions on the Ethereum Blockchain. Essentially, miners from around the world use their computer processing power to solve complex cryptographic puzzles and if successful, the miner adds blocks to the Ethereum Blockchain, earning the gas fee in return for his/her hard work. The fee incentivizes miners and helps to keep the network operating smoothly/ securely. This gas fee is not fixed and changes many times throughout the day. Gas is expressed in a unit known as Gwei, 1 Gwei is equal to 0.000000001 ETH.

Why do gas fees change & why are they so expensive?

Gas fees fluctuate according to supply and demand, this depends on how busy the network is. If the Ethereum Network is “quiet”, demand for computing power is low. As more miners are likely to be available to process transactions during these quieter times, gas prices are...

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