Gas Fees are no laughing matter
On the Ethereum blockchain, doing anything requires you to pay Gas Fees. Read to learn more about Gas Fees, it could save you hundreds of dollars.
What is Gas?
Gas is the measure of the computational efforts required to perform actions on the Ethereum blockchain. In the conventional sense, Gas or fuel enables a driver to drive their car. Similarly, Gas in web3 fuels transactions on the blockchain.
Every operation on the Ethereum Virtual Machine (EVM) has a Gas cost.
Adding two numbers -> 2 Gas. Getting the balance of an Account -> 200 Gas. Sending a Transaction -> 21000 Gas.
A smart contract will consist of many such operations adding up to hundreds of thousand Gas. Gas is measured in a unit called gwei. Gwei is a one-billionth of an Ether, sometimes also known as a nanoether.
How are Gas Fees calculated?
Let’s assume you want to transfer 1 Ethereum to a friend using MetaMask. I wrote about MetaMask in my previous post here.
MetaMask will estimate the Gas Cost to 100Gwei if you want to have a chance to confirm the transaction within 1–2 minutes. So the Total Gas Cost will be Total Gas Units x Gas Price per unit i.e. 21000 Gas x 100Gwei = 2.1Million Gwei = 0.0021 Eth.
At the time of writing this, 1Eth = $2,700. So the total Gas Fees would be 0.0021Eth x 2,700= $5.67
Why do Gas Fees exist?
Gas Fees help in keeping things secure on the Ethereum blockchain. Since every computation requires a fee, bad actors can be prevented from spamming the network. Also, accidental or hostile infinite loops can be avoided since each transaction is required to set a limit of how many computational steps of code execution it can use. The fundamental unit of computation is gas, remember?
It costs over 100$ in Gas Fees to list an NFT today
This is a screengrab from MetaMask. I am trying to list an NFT on the Ethereum blockchain.
Why are Gas Fees so high?
Etherium is getting popular these days. Performing any operation on Ethereum requires you to consume gas and gas space is limited per block. As the Decentralized Apps (dapps) are growing more complex, the number of operations in a smart contract is increasing. Each Transaction is thus, taking more space in a limited sized block. Users must pay a higher tip so that their transaction is prioritized to be taken into the next block.
Strategy to Reduce Gas Costs
If you are looking to reduce Gas Costs, you can set a tip on the priority of your transaction. Lower priority transactions cost fewer Gas Fees but are executed slowly.
Also, a neat trick is to check out the Gas Tracker. You can monitor the current rate and decide if it’s the right time to execute.
Gas is one of the fundamental aspects of the Ethereum network. Understanding how Gas works to configure your transactions is the key to using Etherium efficiently and effectively.