What Is Gas Fee?

Gas fees are essential for processing cryptocurrency transactions. Discover why they vary, and what they mean for users.

Go Back
Blog Thumbnail

🕒 6:24 PM

📅 Jun 24, 2025

✍️ By ethangeorge

Gas fees are transaction fees paid by users to process and validate transactions on a blockchain network, most commonly associated with Ethereum. These fees compensate network participants (miners or validators) for the computational resources required to execute and secure transactions, smart contracts, and other operations on the blockchain.

To illustrate, let's say you have a package you want to waybill to a love one somewhere. If it's through a waybill company, you will be charged a certain amount for the waybill, right? 

That charge... can be likened to Gas Fee.

Why Do Gas Fees Vary?

Gas fees are influenced by several factors:

1. Network Congestion: High demand increases competition for block space, driving up fees.

2. Transaction Complexity: Simple transfers cost less gas than executing a complex smart contract.

3. Gas Price Market: Users can set higher gas prices to prioritize their transactions.

Examples of Gas Fee Usage

1. Sending ETH or Tokens: Transferring cryptocurrency between wallets.

2. Smart Contract Execution: Running decentralized applications (DApps) like DeFi protocols.

3. NFT Minting and Trading: Creating or trading non-fungible tokens.