Cryptocurrency Transaction Fees: How Gas Works Across Major Networks

The way crypto gas fees work varies across different blockchain networks. On Ethereum, for example, transaction costs are determined by the amount of gas required and the effective gas price. This is measured in gwei, a denomination of ETH where one gwei equals one-billionth of an ETH.

The base fee on Ethereum is burned while the priority fee is paid to validators. A simple way to estimate the cost is gas used multiplied by the effective gas price. For instance, a basic ETH transfer typically requires 21,000 gas.

Bitcoin, on the other hand, does not use gas and its transaction fees depend largely on virtual transaction size and the prevailing fee rate, commonly expressed in satoshis per virtual byte. Solana uses a different structure with a base fee per signature and an optional prioritization fee linked to compute-unit settings.