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What are the Ethereum fees?

What are the Ethereum fees?

Guide to Blockchain Fees.  Ethereum-spatium

What is the Ethereum Blockchain?

Ethereum blockchain was introduced to the public in 2014 by Vitalik Buterin. The platform itself was launched in 2015. Ethereum is the first blockchain that went beyond being just a virtual payment means. That’s why it has grown now into a vast ecosystem hosting multiple blockchains and making ETH the second-largest cryptocurrency after Bitcoin. 

Ethereum supports smart contracts by default, which makes it possible to launch various decentralized applications (dApps).

What are the Gas Fees on Ethereum?

Similar to the Bitcoin fees, Ethereum fees (gas) are paid for a transaction to be written in the Ethereum blockchain. Fees are paid in gwei, the smallest fraction of ETH, the Ethereum blockchain cryptocurrency. One gwei is 10-9 ETH. The gas fee is calculated based on the network congestion, supply, and demand. 

Based on the complexity of the transaction and the amount of work required to be done by the validator gas limit also increases. Gas price is paid for the amount of work performed by validators. That’s why the transaction cost is calculated when the gas limit is multiplied by the gas price. Transaction fees may also include tips from users who would like to have higher priority in the transaction waiting queue. 

Also, gas fees protect the Ethereum blockchain from being overloaded with unnecessary spamming transactions.

How Gas Fees are Calculated?

The gas fee or transaction fee is the ‘gas limit’ multiplied by ‘gas price by unit’. As an example, let’s imagine that the gas limit is 10,000 and the price for a unit is 100 gwei, a tiny denomination of ether (ETH). Using the provided formula, the gas fee will be 10,000*100 = 1,000,000 gwei or 0.001 ETH. To find out the average transaction fee, please, visit ycharts. As for May 2024, the average transaction fee fluctuates between $1 to $1.3. At the same time, with the network congestion increasing, the transaction fee will rise.

Why do Ethereum Gas Fees Fluctuate?

If you speak with someone who interacts with Ethereum blockchain the first thing they will say is to be smart about the timing when to send a transaction. Ethereum gas fees change based on the day of the week and the time of the day. The cheapest transactions are available on weekends and early mornings during the weekdays. Also, there are various gas fee calculators and gas fee trackers that you may use to calculate gas fees before sending transactions. Some wallets, like MetaMask, even have an inbuilt gas fee calculator. Other crypto wallets allow the gas fee to be set manually.  

Sometimes, gas fees can grow out of proportion when the Ethereum network demand for transactions is higher than the bandwidth capacity of the blockchain. Usually, gas price spikes are connected with the launch of new projects on Ethereum, such as the ICO boom in 2017, the DeFi boom in 2020, or the CryptoKitties NFT project launch. 

To get access to the Ethereum blockchain everyone requires a crypto wallet. One of the most secure and easy-to-operate crypto wallets is the Spatium Feeless Wallet. Our wallet is powered by MPC and works with all popular chains including Bitcoin, Ethereum, Solana, Polygon, Litecoin, etc. 

It’s secure and easy to operate. Spatium wallet is a perfect match for new users who would like to join web3 and reap its benefits as soon as possible. Also, crypto-savvies will definitely find it convenient and cost-efficient due to our Feeless feature allowing users to pay network fees in the crypto they send, not in the native crypto of the blockchain (currently available for USDC on Ethereum. More chains and tokens will be added soon). 

Spatium Feeless MPC wallet is free to download. It’s available on Android and iOS devices

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27 May, 2024 Spatium Team

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