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In this post, we will introduce you to gas fees
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◩ What are gas fees?
Gas fees are transaction costs on the Ethereum blockchain, paid in Ether ($ETH ) or one of its smaller fractions, air (gwei).
• This fee serves as a form of compensation to the investigators who maintain and secure the network.
• Gas fees fluctuate based on supply, demand and network capacity, and may increase during periods of network congestion.
◩ The concept of gas fees
• Gas fees are an integral part of the Ethereum blockchain. These are the transaction costs that users pay to perform operations on the network. These operations range from simple transactions, such as sending Ether (ETH) from one address to another, to more complex interactions with smart contracts.
• The concept of gas was introduced as a form of compensation for validators who maintain the Ethereum blockchain. Verifiers, who verify and process transactions on the network, receive this fee. Fees are priced in small fractions of ether, known as joe (10^-9 ETH).
◩ How are gas fees calculated?
• Gas fees are calculated through two main components: gas limit and gas price. The gas limit is the maximum amount of work the user expects the investigator to perform for a given operation. On the other hand, gas price is the price per unit of work performed. Therefore, the transaction cost is the product of the gas limit and the gas price.
• In some cases, transactions may include gratuities added to the price of gas. Paying a higher tip may speed up the transaction. Conversely, if a user selects a lower gas limit, their transaction will have a lower priority in the queue.
◩ Why are there gas fees?
• Gas fees act as an incentive for verifiers to participate in an operation to verify the network using their ether. Without these fees, there would be little incentive for anyone to contribute ETH and help secure the network.
• Additionally, gas fees help prevent the network from being flooded with unnecessary transactions. By imposing a cost on each transaction or smart contract execution, the network encourages bad actors to avoid burdening the network with unnecessary transactions.
◩ Gas fees and Ethereum virtual machine #EVM
• The Ethereum Virtual Machine (EVM) is a massive virtual computer that runs applications on the Ethereum blockchain. Many decentralized applications, cryptocurrencies, and tokens have been created using EVM. Since these applications use the Ethereum blockchain, users need to pay gas fees to carry out on-chain transactions.
◩ Gas charges and network congestion
• The cost of gas fees is affected by supply and demand dynamics. If the network sees high traffic, gas prices may rise. Conversely, it may decrease if there is not much traffic. Therefore, users can effectively manage gas costs by understanding network congestion and timing transactions appropriately.
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