How Crypto Gas Fees Work: Pricing Network Resources

Crypto transactions may seem instantaneous to users, but they consume network resources that need to be priced. Gas fees are the mechanism many blockchains use to do this and prevent networks from being overwhelmed by unlimited transactions.

Ethereum provides a well-known example, although other networks like Bitcoin, Solana, and others use different fee models.

On Ethereum, gas measures the computational effort required to execute an operation. A straightforward ETH transfer requires less computation than interacting with a complex decentralized finance (DeFi) smart contract.