1. What are gas or transaction fees?
Crypto gas fees or transaction fees are transaction costs paid by customers to process and validate transactions on a blockchain network. Think of gas fees as the cost of using the blockchain. When you want to send money or interact with the blockchain, you pay a fee. This fee ensures that the network runs smoothly and securely and your transactions are done successfully.
2. How are gas or transaction fees calculated?
There's no standard method for calculating crypto gas fees. Each cryptocurrency has a unique fee structure that influences how much you'll need to pay for gas. Also, crypto projects can adjust their fee algorithms at any moment. Transaction fees are also sometimes determined by the amount of network traffic, the supply of validators, and the demand for transaction verification.
3. Why Do Gas or transaction fees Exist?
Gas or transaction fees motivate people (called validators) to keep the blockchain safe and working. Validators are responsible for adding new blocks and verifying transactions in proposed blocks, thus playing a vital role in the functioning of the blockchain.
4. Gas or transaction fees and Network Congestion
Congestion occurs when the number of transactions awaiting confirmation exceeds the available block space. Congestion on the Bitcoin network can cause delays in transaction processing and increased fees.
Remember, all transactions need to be validated on the blockchain before it's completed. A low or high gas or transaction fee could be the reason why your transactions is fast or slow.