Gas Fee
CryptoGlossary term
Definition
A transaction fee paid to validators or miners on a blockchain network to process and confirm transactions. On Ethereum, gas fees fluctuate based on network demand, meaning they can be very low during quiet periods and spike during times of high activity. Understanding gas fees is important because they directly affect the cost of sending crypto, swapping tokens, or interacting with smart contracts.
Related terms
- EthereumA decentralized blockchain platform that enables developers to build and deploy smart contracts and decentralized applications (dApps). Unlike Bitcoin, which primarily serves as a digital currency, Ethereum provides a programmable platform powered by its native cryptocurrency, Ether (ETH). It transitioned from Proof of Work to Proof of Stake in 2022 to improve energy efficiency and scalability.
- Smart ContractA self-executing program stored on a blockchain that automatically enforces the terms of an agreement when predetermined conditions are met. Smart contracts eliminate the need for intermediaries by running code that is transparent and cannot be altered once deployed. They are the foundation of DeFi applications, NFTs, and many other blockchain-based services.
- Layer 2A secondary protocol or framework built on top of an existing blockchain (Layer 1) to improve its scalability and transaction speed. Layer 2 solutions process transactions off the main chain and then settle the results back on Layer 1, reducing congestion and lowering fees. Popular examples include Polygon and Arbitrum for Ethereum, and the Lightning Network for Bitcoin.
- MempoolShort for 'memory pool,' the mempool is a waiting area where unconfirmed transactions are held before they are picked up by miners or validators and included in a block. When you send a cryptocurrency transaction, it first enters the mempool and waits to be processed based on factors like the fee you paid. During periods of high network activity, the mempool can become congested, leading to longer wait times and higher fees.
Get advice that uses your real numbers
Warren reads your accounts and explains what terms like this mean for your plan. Free to start, no credit card required.