Greater Fool glossary / Crypto & Digital Assets

gas fees

Gas fees are charges you pay to process transactions on a blockchain network, similar to how you pay a fee to a bank for a wire transfer. The fee compensates the computers, called nodes, that validate and record your transaction. Gas fees fluctuate based on network demand, rising when many people are transacting at once and falling during quiet periods.

In practice

You want to send cryptocurrency on the Ethereum network. If the network is busy, a gas fee might be $50, but if the network is quiet, the same transaction might only cost $5. The fee goes to the miners or validators who process your transaction, not to Ethereum itself.

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