Glossary
Gas fee: the cost of an Ethereum transaction
Gas fees are not set by an exchange or a company. They rise and fall with demand for space in each block, so the same transfer can cost more on a busy day.
A gas fee is the charge, paid in ether (ETH), for having a transaction processed on the Ethereum network. It equals the units of gas the transaction uses multiplied by the price per unit, which is a base fee plus an optional tip.
Quick answer
A gas fee is what you pay in ETH to run a transaction on Ethereum: units of gas used × (base fee + priority fee) [1]. A simple ETH transfer uses 21,000 gas; at a 10 gwei base fee and 2 gwei tip it costs 0.000252 ETH [1].
Key points
On this page
What is a gas fee in crypto?#
Every action on Ethereum, from sending ETH to using an app, takes computing work by the network. Ethereum's documentation defines gas as the unit that measures the computational effort required to execute specific operations on the network [1]. The gas fee is what you pay for that effort, and ethereum.org says users pay it in ETH [2].
The fee has a purpose beyond paying for work. By requiring a fee for every computation, the network stops bad actors from spamming it [1]. The original Ethereum whitepaper made a similar point: each transaction sets a limit on computational steps to prevent accidental or hostile infinite loops and wasted computation [3].
Fees are quoted in gwei. One gwei is one-billionth of an ETH, 0.000000001 ETH [1]. Since 1 ETH is 10^18 wei [3], one gwei is 1,000,000,000 wei (calculated).
gas fee = units of gas used × (base fee + priority fee)
Why do gas fees go up and down?#
Each block has a base fee that acts as a reserve price: your offer per unit of gas must at least match it [1]. The EIP-1559 rules, which set this system, make the base fee rise when blocks use more gas than the target and fall when they use less [4]. The target is half the block's gas limit, and a block can grow to twice the target [1]. The base fee can change by at most 12.5% per block [1].
The tip is the part you choose. When there is too much demand, users must offer higher tips to outbid other users' transactions, which is why fees climb when the network is busy [1].
| When | Base fee if every block is full | Base fee if every block is empty |
|---|---|---|
| Start | 10.00 gwei | 10.00 gwei |
| After 1 block | 11.25 gwei | 8.75 gwei |
| After 2 blocks | 12.66 gwei | 7.66 gwei |
| After 3 blocks | 14.24 gwei | 6.70 gwei |
| After 5 blocks | 18.02 gwei | 5.13 gwei |
Starting from a 10 gwei base fee and applying the maximum 12.5% change each block [1] (calculated). This is the largest possible change; the actual move depends on how full each block is.
Where does the gas fee go?#
It splits in two. The base fee is burned when the block is created, removing it from circulation [1]; the EIP-1559 specification says the same, that the base fee per gas is burned [4]. The priority fee, or tip, goes to validators and encourages them to include as many transactions as possible in a block [1].
Gas is an Ethereum idea. Bitcoin also has transaction fees, but its whitepaper defines a fee as the difference between what goes into a transaction and what comes out [5], with no gas units. To compare what you pay across platforms, including exchange fees on top of network fees, see trading fees explained.
Frequently asked questions#
How much is a gas fee today?
Our sources do not give a typical figure, because it changes block by block. The 10 gwei base fee in the ethereum.org example is an illustration [1]. Use your wallet's live estimate, and convert it at the current ETH price.
Why did I pay a gas fee when I only sent a small amount?
The fee depends on the computing work, not the amount sent. A simple ETH transfer uses 21,000 gas [1] whether it moves a large or small sum, so on small transfers the fee can be a large share of the money moved.
Is the gas fee the same as an exchange fee?
No. A gas fee goes to the Ethereum network. An exchange or app can charge its own fees as well. Read more about the network itself in what is Ethereum and about the record it keeps in blockchain.
The bottom line#
A gas fee is the network's price for processing your Ethereum transaction: gas used times the base fee plus your tip. It moves with demand, so check the estimate before you confirm. Read the risk disclosure before you buy or move any crypto.
Sources
Education only. This page is not investment, tax or legal advice. Trading and crypto can lose you money. See our risk disclosure.
