Okay, I get it, the cover photo of the article might make you think like this: “wait, I thought this is an article on Web3 gas fees?, why am I seeing a gas plant as the article photo?” No worries, it’s all good. Let’s begin!

Blockchain protocols rely on users paying gas fees to incentivize validators and miners, serving as compensation for validating transactions. Gas fees, a fundamental aspect of decentralized platforms like Ethereum, represent the computational effort required to execute operations or smart contracts on the blockchain.

This article provides a basic introduction to gas fees in the Web3/blockchain industry. In this article, we will look at a basic introduction to Gas fees and its key aspects.

What is a Gas fee?

A gas fee is the transaction cost paid by users to facilitate operations on a blockchain network. It serves multiple purposes within the decentralized ecosystem. Let's break down its key aspects:

Watch this video on Gas fees:

Computational Work

Initiating a transaction or executing a smart contract involves computational work for processing and validation. The unit of measurement for this effort is called "gas," indicating the computational workload associated with an operation.

Gas Price

Gas prices, expressed in the native cryptocurrency (e.g., Ether on Ethereum), are set by users to determine transaction processing priority. A higher gas price results in faster transaction confirmation, reflecting the willingness to pay for quicker validation.

Transaction Cost

The total cost of a transaction is computed as the product of gas used and gas price, defined by the formula Transaction Cost = Gas Used * Gas Price. This cost is the compensation for miners or validators who process and include transactions in a block.

Gas Limit

Every blockchain block has a gas limit, restricting the total computational work within that block. Transactions exceeding this limit won't be processed, ensuring network stability and preventing abuse.

Understanding and effectively managing gas fees is crucial if you want to interact with decentralised applications (DApps) and carry out transactions on blockchain networks. As always, do your own research (DYOR) and learn more about Gas fees with these resources:

What is a Blockchain Gas Fee? | NFT Gas Fees Explained | Kraken

Gas (Ethereum): How Gas Fees Work on the Ethereum Blockchain

What are Crypto Gas Fees? | The Motley Fool

Cover photo by Frantzou Fleurine on Unsplash