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Crypto Gas Fee: Truth About How Much You Really Pay!

The majority of the crypto world users, including crypto creators, always keep a keen eye on the crypto gas fee. This fee affects the cost of crypto products and services, also known as crypto transactions. Simultaneously, the gas fee can differ from the blockchain gas fee.

So, let’s first understand their basic difference before we see where it applies, what raises or makes it fall, and how it affects a crypto user!

crypto gas fee

What is Crypto Gas Fee?

The term itself loosely counts beyond what is blockchain gas fee taken against validating transactions on the blockchain. Hence it may sometimes get confusing to mistake it for things other than a crypto transaction fee, like NFT minting fees, etc.

The correct definition of Gas fee recognizes it as the transaction fee paid as the sum to miners on the blockchain to get the user’s transaction included within the block. While it explains the commonly used term gas fee, it’s essential to learn that gas fees may never be static.

Based on more than one contributing factor, the gas fee could always keep fluctuating in value between different periods.

Where does Crypto Gas Fee Apply?

Before we get informed regarding the factors affecting the cost of the gas fees, it’s worthwhile to understand everywhere it applies. Doing so can help us recognize the avenues wherever a blockchain gas fee applies and how it differs from each other.

1. Performing Crypto Transactions

A crypto transaction fee rate can differ vastly depending on the blockchain consensus mechanism. For instance, a Proof-of-stake consensus run blockchain like Solana has a minimal gas fee which is extracted from the user towards using DeFi apps or other DApps.

In contrast, a Proof-of-work based blockchain will comparatively have higher gas fees, for it has to compensate its validators who run the blockchain.

2. Mint NFTs

In the crypto world, the prime time a user pays a crypto transaction fee is when they want to mint NFTs. The process merely includes creating or registering the linked asset, virtual or real, to an ERC-721 standard token carrying metadata. It is then integrated with a smart contract so it can be traded autonomously on the supported NFT marketplace.

When the user finalizes its creation, they must pay a fee to get it validated on the blockchain. Otherwise, the token never gets listed on the blockchain. Here, paying a higher fee allows the NFT creator to mint their NFT more quicker.

Also Read: Ethereum Crypto: Can Rising Cryptocurrencies Dwarf ETH?

What determines Crypto Gas Fee?

To understand how the blockchain gas fee changes over time, it is important to learn how demand and supply work.

When the demand for validating transactions rises on the blockchain network, miners can decide to pick transactions that pay more than the ones paying less. Hence, anyone in a rush to mint NFT or wanting a quicker completion of their transaction will pay more.

crypto gas fee

Likewise, lower demand on the blockchain means fewer users demand quicker validation of their transaction, or the queue is comparatively lesser. The latter condition is true on most blockchains that promise quick transactions and demand a lower blockchain gas fee. Here, the crypto fee will not deviate greater than the hovering standard.

Can Blockchains Fake a Higher Crypto Transaction Fee?

It is possible on a blockchain network to deliberately raise the transaction fee when validators purposely take long to validate them or when they pick lesser fee transactions more to then switch to the one with a higher fee.

Why is Ethereum Crypto Gas Fee High?

The leading reason that makes the Ethereum blockchain gas fee high is its popularity. It has burned over $8.2 billion worth of ETH tokens to date, with over 1 million daily transactions. Such high movement contributes to filling the blocks more, raising the gas price for the entire network.

Moreover, the crypto transaction fee on the Ethereum blockchain also depends on the value of the ETH tokens. As the price of the Ethereum tokens rises, so does the gas fee cost per transaction.

crypto gas fee

How to Make Crypto Gas Fee Cheap?

There can be various ways by which it can be made possible to reduce the crypto fee on a specific blockchain network. While adopting them is a matter of various individual elements, they are subjected all the same to time and scalability infrastructure.

For instance, the long-awaited Ethereum 2.0 upgrade will modify the previously used Proof-of-work consensus mechanism to Proof-of-stake. It was initiated long ago, but its complete implementation is pending and slated to complete by July 2022.

Similarly, performing the following modifications can help a blockchain network to offer a reduced gas fee:

Greater Adoption

Wouldn’t a wider adoption of the blockchain contribute to increasing the crypto transaction fee, as mentioned earlier? Not quite, no.

When more users join a blockchain network or interact with it more, it also attracts more validators. Hence, having more validators directly contributes to processing transactions faster, erasing the need to pay a higher fee to metaphorically ‘jump the queue!’

Fewer DApps

While this medium to reduce the gas fee is not beneficial to the blockchain, it can help reduce the gas fee. Fewer DApps on the blockchain means fewer transactions are initiated per second, or their types are mostly singular.

In contrast, having a wide variety of DApps, like a crypto exchange, smart contracts, DeFi systems, GameFi systems, etc., would surely increase the traffic on the network. Ultimately, it will have to validate more transactions per second, raising the chances of transactions stacking up.

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Using Optimized Crypto Wallets

Some crypto wallets do not offer zero-fee account access, which leads to the user paying more gas fees. For instance, your crypto wallet’s 2% transaction fee can increase your transaction value, demanding a higher blockchain fee per the higher figure.

Therefore, using optimized wallets like FTS, Dapper ETH, etc., can help you reduce gas fees on blockchains like Ethereum, Solana, etc.

Alternatives to Paying High Crypto Gas Fee

The common yet least ideal alternative for paying a less blockchain gas fee requires picking a less popular blockchain. An alternative to this is to pick a faster blockchain, but the registered users will be comparatively lower in both cases. However, it can benefit early crypto adopters or new companies with limited crypto wallet budgets.

Final Words

The subject of the crypto gas fee will always attract attention, as it is an inevitable factor while interacting with a blockchain. However, one can expect the blockchain gas fee to reduce once the blockchains operate with better scalability, more verified validators, and better governance.
Until then, it will be useful to discover or create ways to reduce the crypto transaction fee, which is possible by developing innovative blockchain frameworks.

FAQs

Where do Ethereum gas fees go?


The gas fees paid by a user for their transaction on the Ethereum network go to miners as compensation for validating transactions on the network. Any blockchain with a Proof-of-work system will perform similarly when charging gas fees from any user.

Can I avoid gas fees?


It is not possible to avoid gas fees on the Ethereum network, but a user can pick a different blockchain for trading NFTs. Some blockchains or NFT marketplaces charge comparatively lesser to nil gas fees for crypto transactions.

Will Ethereum 2.0 reduce gas fees?


Many speculate that getting a reduced gas fee on the Ethereum 2.0 network is untrue, but users can expect fewer high price fluctuations.

Are gas fees transaction fees?


The gas fees paid by a user on the Ethereum network go towards validating the user’s transaction on the block by miners. Hence, it can be considered a transaction fee, not to be confused with crypto exchange fees.

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