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A Guide to Gas: Everything you need to know about the Ethereum transaction fee to buy your first NFT

What is gas?

Gas refers to the Ethereum transaction fee. This fee is required to conduct a successful transaction on the Ethereum block chain. Whenever you buy or sell something using ether, a gas fee must be paid.

Why must a gas fee be paid?

Gas fees pay for the computational resources needed to validate a transaction on the blockchain. More specifically, gas fees go to the miners who are validating transactions. Miners can prioritise which transactions they validate according to the gas fee that they will be paid.

How much is gas?

There is no standard gas price. The gas fee is determined by supply and demand on the Ethereum blockchain. On the supply side are the Ethereum miners. On the demand side are the NFT creators, sellers and buyers who are transacting on the blockchain.

Why do gas fees get so high?

High gas fees are due to the increasing popularity of Ethereum. As more people use the network, there are more transactions using the same resources. We see spikes in gas fees when lots of people are trying to transact at the same time. For example, when a new NFT is released and many people try to mint it, the demand on the network at that time causes gas fees to spike.

Will high gas fees always be an issue?

In the not too distant future, gas fees should be a lot lower. A change that is on its way, and that should lower gas fees, is the move from the proof of work (PoW) validation model to the proof of stake model (PoS). Without going into the technical detail of the two models, it is enough to say that PoS validation is expected to be more efficient and cheaper than PoW.

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