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What is Ethereum Gas Fees?

BitForex Editor
Sep 23, 2020

The advent of a digital way of trading was expected to bring with its innovation and a constant need for change. This was evident in the rise of Bitcoin, as it became the numero uno of trading. Over time, other channels of trading will join the market and a new blockchain tender was formed. Ethereum, the new kid on the block soon became widely acceptable, and the rush to mine became rampant. This in itself was no ordinary feat, as it requires the input of time and effort. To measure this effort, a new metric was set in a place known as Ethereum gas.

So in this blog, we would be looking at Ethereum gas and its details. To fully understand the term, Ethereum Gas Fee, we need to break it down. When we break it down, we will have these terms:


Ethereum is a popular cryptocurrency that is only second to the Bitcoin. It is a decentralized blockchain protocol with an innovative feature called a smart contract, which makes it stand out from other blockchain networks.

Ethereum Gas

Ethereum Gas is a standard or unit used to measure the amount of effort needed by a computer to complete a specific task. The Ethereum blockchain is built so that for an operation to be carried out, it requires a particular amount of gas to run. The Ethereum Gas is like a fuel that drives all processes on the Ethereum platform. The amount of gas used to perform an operation determines the fee that the person who initiates the process will be charged.

Ethereum Gas Fees

Ethereum Gas Fee is the amount of payment to miners to perform an operation. The gas fee is equivalent to the amount of gas required to run an operation on the Ethereum network. The gas fees have been a cause for worry among users of the Ethereum network as the gas cost has continued to go higher. However, this is necessary to make as a miner to gain profits. In order to attract more miners to the network, more miners on the network would mean higher hash rates, which will lead to a faster and more secure system, which is the aim of the Ethereum network.

Why Does the Gas Using Only on The Ethereum Network?

This is one commonly asked question by a lot of people on the Ethereum network. Some say that the bitcoin platform users are not charged for gas like users of the Ethereum platform. This is simply because the bitcoin system is only designed to transfer money from one person to another irrespective of the location without the need of a middle man and create a currency that can easily be converted to any type of currency much cost. The Ethereum network, on the other hand, allows money to be sent to a person provided the person performs a specific task. This is made possible through the smart contract feature in the Ethereum network. This smart contract act as a binding agreement between two people. The receiver of the Ether only receives it when a specific condition is met. These smart contracts are a series of tasks or instructions that do not initiate unless the preceding instruction has been initiated and completed. In other words, the completion of one instruction will trigger the start of the next instruction. Smart contracts are initiated, executed, and finished in a very systematic manner. This makes it particularly useful in exchanging money in a very transparent and conflict-free way as the system is unbiased and cannot be corrupted.

A smart contract is mostly used by people who want to pay for the service rendered by someone. To do this, the two people involved will fill up a smart contract that will only make the payment process automatically initiated when confirmation that the service has been rendered.

Ethereum Gas Limit

The Ethereum gas limit is the highest amount of gas a user is willing to pay a miner for a particular process or processes to be executed. Before setting a gas limit, it is essential to know how much gas is required for that specific process to be performed. Setting your gas limit too high or too low both have adverse effects on the execution of the process. What happens in both situations is explained below:

When The Set Gas Limit Is Too Low

When the gas limit is set lower than is required to execute the process, the process will not be completed. Since the process is not completed, the transaction is returned to the default state, i.e., everything returns to how it was before the start of the process. However, the gas fee paid for the process to be initiated will not be returned as it has already been used to run the process even though it couldn't reach the completion stage. It is important not to set your Ethereum gas limit lower than is required as it will just lead to a waste of Ether as you will need to pay the full fee again if you want to perform the operation again.

When The Set Gas Limit Is Too High

What happens when the set that limit is too high is that the process will run to completion, and the extra gas will be refunded back to the initiator of the operation. This shouldn't be a reason to set your gas limit to be too high. Setting your gas limit to be very much higher than required will make miners pick other transactions with only very little or no gas to return at all over yours with plenty of gas to return.

That said, you need to know how much gas is required for a particular process to be carried. After knowing this, you need to set your limit just a bit over it to make it run to completion and make your transaction one that miners will want to process.


This article has exposed a couple of things about how the Ethereum platform works, what Ethereum gas fee is, and why they are demanded before any operation can be carried out on the Ethereum platform. We have also learned that a smart contract is one major distinguishing factor between bitcoin and Ethereum.

There is a need for all Ethereum platform users to know how to calculate the Ethereum gas fee to have a practical guide when choosing your Ethereum Gas Limit to avoid setting it too high or too low. This article has also made you aware of the adverse effects of making your limit too high or too low and how to make it just right for your transactions to be accepted and completed by miners.

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