Crypto Basics 1 min read
Gas Fee
Also known as: Transaction Fee, Network Fee
Payment to the network for including your transaction in a block. Denominated in the native coin (ETH, SOL, BTC).
How it works on Ethereum
Fee = Gas Used × Gas Price.
- Gas Used — how much computation the transaction consumes (a simple transfer = 21,000, a Uniswap swap = ~150,000).
- Gas Price — priced in gwei (1 gwei = 10⁻⁹ ETH), set by the fee market.
Since EIP-1559, the gas price has two parts: a base fee (burned) and a priority tip (goes to the validator).
Why it matters
- High fees push users to Layer 2 networks (Arbitrum, Base, Optimism).
- Fee spikes are themselves a signal of on-chain activity and speculation.
Frequently asked
Why are Ethereum gas fees so volatile?
Ethereum uses an auction-like market (EIP-1559). When block space is scarce (NFT mint, airdrop hype), fees explode. Layer 2s exist to solve this.
Do Bitcoin transactions also use «gas»?
Bitcoin has fees but no «gas» concept — you pay per byte of transaction data. Complex scripts cost more, simple transfers cost less.