TLDR: Gas fees are the cost of doing crypto business. It’s built into every transaction in crypto-land.
Heinlein said there’s no such thing as a free lunch, and the crypto world certainly has some fees that could cost you. Don’t worry: BFF has your back. Today we’re getting into one of the top fees you’ll run into: gas fees.
Just like the gas in your car gas fees power the Ethereum blockchain network in terms of transactions. Buying crypto? Fees. Selling crypto? Fees. Trading one crypto for another? Fees.
Good question. If you’re going to dabble in crypto, it makes sense to understand what fees are involved. The best way to explain it is to think of Ethereum like a busy pizza joint. And when I say busy, I mean busy: this pizza joint is open all day and night, around the clock. Always serving up pizza.
Just like you have to give the pizza joint money for a fresh pie, Ethereum needs compensation to carry out the high-level computing wizardry to handle the transaction. This is true for everything Ethereum, including NFTs. If you want to create a new NFT (called “minting” in crypto-speak), you have to handle the gas fees.
Let’s say in this example the crypto-pizza joint is super busy, but you want to trade some Ethereum for another crypto coin. On the other hand,the cost is going to be much higher compared to if you wait for the pizza joint to settle down a bit. It isn’t hyper busy all the time, which means that sometimes are busier than others.
As mentioned earlier, not all Ethereum stuff is high in gas fees. If you want to send your bestie some ETH, you can certainly do that without a ton of fees. On the other hand, if you were trying to use the blockchain while heavy NFT minting is going on, you might have experienced way more gas fees than expected.
Not so fast. Sure, gas fees are annoying, but here’s the thing: they’re everywhere, just under different names. These fees can be called “miner fees,” or just “blockchain fees,” or even just “network fees”.
The decentralized nature of cryptocurrency doesn’t mean that there isn’t computing power behind keeping everything running smoothly. Servers cost money. If people are operating nodes directly for the blockchain, they should be compensated for that.
Think about it this way: as you get deeper into the crypto ecosystem, you begin seeing its potential. Gas fees are just a way to keep everything running. With something as powerful as an entirely different way of handling finance on a global scale, shouldn’t we consider contributing any way we can?
This is not financial advice. If you don't want to spend money investing in crypto or Web3 — you don’t have to. The intent of this article is to help others educate themselves and learn.
Serise Lange is a contributor to Nav.it, the money management app helping all users build a future of wealth.
