Explaining Crypto Gas Fees to the Absolute Beginner

This guide explains transaction fees, providing insights into their necessity, mechanisms, and strategies for optimal usage of crypto gas fees while exploring the crypto space.

Explaining Crypto Gas Fees to the Absolute Beginner
Explaining Crypto Gas Fees to the Absolute Beginner. Image by studiogstock on Freepik

History of Crypto Gas Fees

Transaction fees did not emerge from greed but as a necessity. They originated as safeguards against network overload, ensuring only legitimate transactions enter the blockchain. Just like toll roads but on a digital highway, these fees maintain smooth traffic flow, and incentivize those responsible for network infrastructure. In addition, transaction fees serve as a dynamic auction during peak demand, prioritizing critical transactions by allocating some amount of limited blockspace to the highest bidders.


  • Guard the Gates: Fees deter spam and frivolous transactions, preserving network integrity and security.
  • Fuel the Engines: Miners, acting as blockchain security guards, are rewarded for their efforts in fortifying the network.
  • Balance Supply and Demand: Acting as a dynamic pricing system, transaction fees allocate limited blockspace efficiently based on user urgency and willingness to pay.


  • The Price of Popularity: A surge in network demand during events like NFT mints or market rallies intensifies competition for blockspace, leading to unexpectedly high fees.
  • Unpredictable Fluctuations: Transaction fees are dynamic and subject to fluctuations based on network congestion, making budgeting for larger transactions challenging.

Mechanics of Fee Collection

Different blockchains process fees uniquely. This leads to two primary fee types:

  • Data Storage Fees: Blockchain networks like Bitcoin prioritize data storage, charging fees based on transaction data size.
  • Computational Effort Fees: Smart contract-driven blockchains like Ethereum employ gas fees, measured in units called “gas,” reflecting the computational effort required for contract execution.

Customizing Your Fees:

Some wallets acknowledge the need for flexibility, offering options like “Eco,” “Fast,” and “Fastest” to strike a balance between cost and speed. Also, Advanced crypto users can customize gas prices, to maximize value at the lowest price possible.

Exchange Trading Fees:

Centralized exchanges feature their own fee structures, including trading fees, withdrawal fees, and investment fees. Many exchanges offer loyalty programs and promotions, providing active users with reduced fees.

Choosing the Best Option for You:

Choosing the ideal transaction fee is a personal decision, balancing urgency, cost considerations, and specific use cases. Understanding personal needs and the nuances of fee customization helps users navigate crypto transactions confidently, ensuring every transaction is efficient and cost-effective.

Personal Note From MEXC Team

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