Gas is the unit that measures the work needed to carry out an action on the EthereumEthereumAn open blockchain that can run applications and smart contracts, with its own cryptocurrency called ether (ETH). network. Every action costs a certain amount of gas, and the network feeNetwork feeA fee paid to a crypto network, not to a bank or company, for including your transaction in a block. is that amount multiplied by the price per unit. The fee is paid in Ether (ETH)Ether (ETH)The currency of the Ethereum network, used to pay network fees, as a stake under proof of stake and to send value between people..
Think of gas as fuel for a car. A longer trip needs more fuel, and a more complex action needs more gas. A simple ETH transfer always uses 21,000 units of gas, while a complex smart contractSmart contractA program that runs on a blockchain and automatically carries out what it was written to do once certain conditions are met. can use many times that.
How is the fee calculated?
Gas prices are quoted in gwei. One gwei is one billionth of an ETH. The fee has two parts:
- The base fee, set by the network according to demand. It is burned, meaning it is permanently removed from circulation.
- The priority fee, or tip, which you add and which goes to the validator who includes your transaction in a block.
The base fee has been burned since August 2021, when the so-called London upgrade took effect.
An example
Say the base fee and tip together come to 2 gwei per unit. A simple transfer then costs 21,000 × 2 = 42,000 gwei, or 0.000042 ETH.
What to keep in mind
If a transaction fails, for example because a smart contract rejects it, you still pay for the gas it used. Gas prices rise when the network is busy, so it can be worth waiting for a quieter time.
Everything in Myntkaup Learn is written and regularly reviewed by the Myntkaup editorial team. It is for education and is not investment advice. Editorial policy. Updated 18 October 2026.