What Are Crypto Gas Fees?
All Cryptocurrencies are powered by Decentralized Blockchain Networks, and there are fees for every Cryptocurrency transaction.
These “Gas Fees” are different depending on which Network you are using and priced based on different factors. This means some Blockchain Networks are more expensive than others.
The time of day the transaction is being placed and the Blockchain’s current usage will definitely have an impact on the Gas Fee price. So, by understanding how “Gas Fees” function, you will not only save money but enjoy much smoother & quicker transactions.
Understanding Cryptocurrency Gas Fees?
When making an International Bank Transfer, your Bank charges you a Fee to Process & Send the Money Transfer, the same thing applies when making any Cryptocurrency Transfer, “Gas Fees” are a fee taken by the Blockchain Network you are using to Process the Transaction.
The “Gas Fees” are used to compensate “Nodes” which are Individual Computers (Validators or Miners) used to Validate every Cryptocurrency Transaction.
How are Gas Fees Calculated?
Most Blockchains use Advanced Algorithms & Protocols to Calculate Real Time “Gas Fees”.
There are 4 main causes for Gas Fee Price Changes:
The Higher the Demand, the Higher the Price.
Simply put, High Season & Low Season Prices, based on the Current Activity.
The more Complex the Transaction, the Higher the Fee.
Example: When using additional Advanced Features on Decentralized Finance (DeFi) Platforms or Minting NFTs (Non-Fungible Token).
Consensus Mechanism Models
Every Blockchain Network uses different Protocols & Parameters for Consensus to Verify & Validate Transfers.
VIP Tipping Functions
Just like when you go to the Front of the Queue and Tip the Bouncer to get into the Club Quicker.
Some Blockchain Networks Offer an Option that Allows Users to Select a “Priority Fee” for Quicker Transaction Speeds.
This Incentivises Validators to Prioritize them over everyone else in the Queue.
How to Check Live Gas Fees?
There are Third-Party Cryptocurrency Websites & Blockchain Explorers that have Price Aggregators so you can view the Live “Gas Fees” in Real-Time to see if it’s a Good Time to do your Transaction.
Here are the Most Popular Websites with “Crypto Gas Trackers”
Cutting Costs on Gas Fees?
Using the 3 Methods below can Drastically Reduce the Cost when Transferring your Tokens.
- Check Network Congestion
- Always Set a Maximum Price for the Gas Fee
- Never Transfer Cryptocurrency During Major Crypto Events