For example, your credit card company likely charges the vender a small fee when completing a transaction or if you were to send cash to a family member using a common payment service, there would most likely be a fee involved for that transaction as well. These instances are not unlike other real-world transactions. Occasionally, you will also pay a gas fee in order to connect your wallet to other dApps, or decentralized applications, such as an exchange mentioned above. If you aren’t familiar with NFT purchases, I suggest reading my earlier blog to learn more about buying NFTs. In short, a gas fee is applied when sending cryptocurrency from one wallet to another and the same is true for sending NFTs. In the future, should you want to exchange out of Sylo and into another cryptocurrency, this requires more gas. To complete the exchange, this requires more gas. Instead, you purchase some Ethereum on Coinbase and send to your already downloaded MetaMask wallet. You visit Coinbase only to realize that Coinbase doesn’t currently support Sylo.
(This is merely an example, not a recommendation to buy or sell). 2 How is Crypto Gas Used?Ĭonsider the following example: you’ve researched a new crypto currency that sounds interesting, for this instance we’ll use a lesser known alternative coin called Sylo. The fees are paid in Ethereum’s native currency, but are also denominated in GWEI. When demand is low, gas prices usually fall. When the demand is high, miners can ask for more in gas fees. Ethereum miners, whose equipment and power support the network, will set a price to perform computations based on supply and demand. A crypto topic that continues to come up more and more is the cost of gas and why it’s so high.Ĭrypto gas refers to the cost required to perform a transaction on the Ethereum network.
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