Ethereum (ETH) gas fees have been astronomical lately. It's almost not even worth it to move your ETH around between wallets or exchanges because of it. The network is becoming more clogged by the day due to the overwhelming popularity of crypto around the world. This is causing the fees associated to the network (gas) to rise along with the value of the token.
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This article is meant for educational purposes only.
According to The Ethereum Foundation, gas is essential to the Ethereum network. It is the fuel that allows it to operate, comparable to the same way a car needs gas to work properly. Gas is the unit that measures the amount of computational effort required to execute specific operations on the Ethereum network (execute smart contracts, DApps, etc). In order to execute these operations, you're going to be paying out gas.
How are these gas fees paid? In the Ethereum native currency, ether (ETH). They are denoted in Gwei, a denomination of ETH, equal to 0.000000001 ETH. This makes it easier to denominate your gas fees, where you can say 1 Gwei instead of 0.000000001 ETH. That's a lot of zeros! Everything on the Ethereum network requires gas in order to operate... including transactions themselves.
But what determines how much gas you will be required to pay out? This is set by a market price determined by the demand of resources for the network. The larger the smart contract you are trying to execute, the higher the gas fee. The faster you want this contract executed, the more you will pay as well. You can alter these gas fees in this sense... as you can wait longer for the transaction to go through at a smaller gas fee! You can check out the Ethereum gas station here!
Many people believe in this economic model as a means for the future. Even though Ethereum gas prices are massive recently, it doesn't take away from the beneficial factors of the concept. The gas fees make the network more secure by preventing actors from spamming the network with bogus contracts. This helps keep the network flowing smoothly for all users.
To ensure that the network is utilizing only as much computational power necessary to execute a contract, each transaction is limited to how many steps of code execution it can use. That fundamental unit of computation is where the term "gas" comes from. So, no need to fill up your portable gas tank, as the computational power already exists for us! Hopefully, with the launch of Ethereum 2.0, the power needed to execute contracts will be drastically decreased, allowing us to have affordable and efficient gas prices in the future.
Have you halted moving around your Ethereum due to the high gas fees?
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