Gas fees are what you pay a blockchain to process your transaction. Every action — sending tokens, swapping on an exchange, minting an NFT — uses the network's shared computing resources, and gas is how you pay for them. The fee changes from minute to minute because block space is limited, so the price rises when many people want in at once and falls when the network is quiet.
Why gas exists
A blockchain like Ethereum is a shared computer that thousands of machines run in lockstep. Its capacity per block is capped, and that space has to be rationed somehow. Charging a fee does two jobs:
- It prevents spam. If computation were free, anyone could flood the network with useless transactions.
- It allocates scarce space. When demand is high, people who value their transaction more can pay more to get in sooner.
The fee is called gas because it is measured in small units that meter how much work your transaction asks the network to do.
How the fee is calculated
Two things set the cost:
- Gas used — how much work your transaction takes. A simple transfer is cheap (on Ethereum, 21,000 gas). A complex smart-contract interaction, like a multi-step DeFi trade, uses far more.
- Gas price — how much you pay per unit, quoted in gwei (one gwei is a billionth of ETH).
Roughly: fee = gas used × gas price. You control the first by choosing which action to do; the second moves with the market.
Base fee and priority fee
Since an upgrade called EIP-1559 (2021), Ethereum splits the gas price into two parts:
- Base fee. Set automatically by the network based on how full recent blocks were. If blocks are more than half full, it rises for the next block; if emptier, it falls. The base fee is burned (destroyed), not paid to anyone.
- Priority fee (tip). An extra amount you add to incentivise validators to include your transaction first.
So a wallet's "fast / normal / slow" options are really just different tips on top of the current base fee. When people talk about "gas being high," they usually mean the base fee has spiked because blocks are full.
