Arts & Crypto
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Arts & Crypto

What are Gas Fees?

In very simple terms, ‘gas fees’ are transaction fees.

It is a charge that the user must pay to compensate the computing energy used by the blockchain network to process an individual transaction. This fee is used to pay miners for solving complex mathematical puzzles as a reward.

The miners are anonymous and they validate transactions on the network, making sure the ledger is immutable and secure.

How is it calculated?

There are two variables necessary to calculate gas fees

– Gas price (at time of transaction)
– Gas needed to execute the transaction

Gas value = Gas used * Gas Price (Gwei)

(Ethereum gas prices can be checked on ETH Gas Station)

On most gas trackers, or wallets like MetaMask, there are options to select the transaction speed — Slow, Average, Fast

Depending on the transaction, you could choose which speed to go for.

Metamask wallet “Customize Gas”

According to the network’s level of activity, the gas prices will also increase.

For faster transactions, more gas will be required to process them.

Gwei

Giga+weiGwei, is a smaller denomination of the currency Ether (ETH), the token of the Ethereum blockchain.

Similar to how the Indian rupee is divided into paisa, ETH’s smallest denomination is wei.

  • 1 billion Gwei = 1 ETH
Source: Zastrin

Why do we need gas fees?

To carry out transactions, a certain amount of power is needed. Because of gas fees, random spam transactions are prevented and the blockchain network remains highly secure.

Why are gas fees so high sometimes?

With over 3000 dApps on the Ethereum blockchain, there’s an increased demand for block space.

The price of ETH is also volatile, and has increased substantially from 2018/2019. Since gwei is a denomination of of ETH, the gas price also goes up along with it.

This sometimes makes it harder for smaller crypto/NFT players who are just getting into the game, and honestly, the workaround isn’t that efficient or helpful.

To save yourself from high fees, blockchains like Solana, Polygon, Avalanche and NEAR can be used. Their fees are significantly lower and are a great way to get introduced to the NFT space without getting your pockets emptied!

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A blog with a mission to educate creatives about Crypto and Digital Arts. A&C is your gateway to honest, reliable, proof-read and inspiring educational content about the Web3 space.

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Arts & Crypto

Arts & Crypto

A cult community of cryptocurrency and blockchain enthusiasts, artists and creators, interested in learning about NFTs, digital arts and the crypto space.

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