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Rachel Welch

28 October 2022 202 Read Crypto

What Are Gas Fees in Crypto?

Gas fees are the cost of processing network transactions in cryptocurrency. The fee is usually lower than the price of ETH. Each gas unit represents the amount of energy that is required for each transaction. Gas prices are often denoted in gwei, which is the same unit as ETH, and is one billion times smaller than ETH.

Gas fees are necessary for the functioning of the Ethereum blockchain. This is needed to send ETH, mint and buy non-fungible tokens, and use Ethereum-based smart contracts and decentralized applications. The amount of gas required to process a transaction varies depending on the use case. Simple transactions, like sending an ETH, tend to be less expensive than executing a more complex smart contract or dApp. Gas fees also fluctuate in price, which is determined by supply and demand for transactional capacity on the network at the time of execution.