A gas fee is something all users must pay in order to perform any function on the Ethereum blockchain.

There is no such thing as a free lunch and there’s certainly no such thing as a free transaction. If spending $5 to receive $20 at an ATM can be frustrating, imagine spending $100 to send $500 or receive a PNG of a penguin.

While it might seem a steep example, that can sometimes be the case in order to send a transaction or perform a function on Ethereum’s network. And unlike the case with ATM fees, there’s no way the Ethereum network will refund you for your gas fees at the end of the month.

What is Gas?

Gas is the term for the amount of ether (ETH) – the native cryptocurrency of Ethereum – required by the network for a user to interact with the network. These fees are used to compensate Ethereum miners for the energy required to verify a transaction and for providing a layer of security to the Ethereum network by making it too expensive for malicious users to spam the network.

Even though they are an effective means of incentivizing miners to keep verifying transactions and maintain network security, gas fees are nonetheless every user’s most hated part about Ethereum. People hate gas fees not only for a general disdain toward fees, but because they can be absurdly expensive when the network is congested.

So, let’s dive into what can make gas fees so expensive and what simple steps you can take to save money when interacting with Ethereum’s ecosystem.

How are Gas Fees Calculated?

In order to get an understanding of why gas fees cost so much and how you can save on them, it’s important to understand how they are calculated.

Because fees on Ethereum are usually much less than 1 ETH (although sometimes it doesn’t feel like it), Ethereum employs a metric system of denominated units called “wei,” where 1 ETH is equal to 1 quintillion wei. (A quintillion is a number with 18 zeros after it.) One of the most common wei denominations, and the one used to represent gas fees, is gigawei (gwei), or 1 billion wei. Therefore, when you check on a gas tracker and see that the average gas for a transaction is 100 gwei, that means you should expect to pay a base fee of 0.0000001 ETH for a given transaction ($0.00031 at press time)

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