What is Gas in Crypto?
The term “gas” in crypto typically refers to gas fees paid on the Ethereum network. It is the computational power necessary to validate transactions and execute smart contracts on the blockchain. Gas fees are the transaction fees that users pay to compensate for that work
What is Gas on the Ethereum Network?
Gas on the Ethereum Network is a measure of the amount of work (computational power) a transaction requires. This amount of power that a transaction requires will influence the “gas fee” that users pay to complete the task.
Each transaction requires gas, and each gas unit is assigned a gas fee. This rate fluctuates according to supply and demand across the network. Gas fees are paid using Ether, the native token on the Ethereum blockchain, or Gwei, a smaller denomination of Ether.
Gas fees compensate the miners/validators for the computational power it takes to validate transactions and keep the network secure.
The gas fee is calculated with a simple equation:
Gas fees = Gas limit * Gas price per unit
Gas limit refers to the estimated maximum computational power your transaction will consume.