Gas fee explained: Why do you need to "refuel" for everything on the blockchain?

You have successfully created your first Web3 wallet, and it must feel amazing! You now hold the “keychain” to a new world, ready to make your mark.

So, you’re about to perform your first on-chain operation—maybe sending some funds to a friend or purchasing a desired NFT. Excited, you click the “Confirm” button, and suddenly, your MetaMask wallet pops up a window. Besides the amount you want to transfer, there’s a term you don’t understand at all: “Gas Fee,” followed by an additional charge.

Your mind immediately fills with questions: “Gas? Gasoline? What is this? Am I surfing the internet and also have to ‘refuel’ the blockchain? This is so strange!”

Don’t worry, you’re not the first to have this question. Gas fee is arguably the first “obstacle” all Web3 newcomers encounter. But trust me, after reading this story, you’ll see that this seemingly strange “refueling fee” is actually the core and most ingenious economic pulse that keeps the entire decentralized world running.

Understanding Gas Fees: Why do I need to “refuel” on the blockchain?

A “Global Express Network” Without a Boss

Let’s go back to the core concept: blockchains like Ethereum are a “world computer.” But this computer isn’t operated by a company like Google or Amazon; instead, it’s maintained collectively by thousands of independent, unfamiliar “volunteers” around the globe.

To help you understand better, let’s use an analogy:

Imagine the entire Ethereum network as a global, “decentralized courier network” without a central headquarters.

You are the customer who needs to send a package.

Your transaction (sending funds, buying/selling NFTs, interacting with DeFi protocols, etc.) is the package you want to send.

Thousands of “validators” (called “miners” in PoW era) worldwide are the couriers in this network.

Now, you want a courier to pick up your package and deliver it safely and accurately to the destination (another wallet address or a smart contract). The question is, what gives this unfamiliar courier the right to serve you?

Why do we pay Gas Fees? Two main reasons

Reason 1: Compensation for labor, it’s only fair

These “couriers” are not doing charity work. They incur real costs to help you handle your package:

They need to buy and maintain high-performance “delivery vehicles” (top-tier computers).

Their “delivery vehicles” consume “gasoline” (a lot of electricity).

They need to invest time and effort to ensure the network’s security and stability.

Gas fee, essentially, is the “delivery fee” or “tip” you pay these couriers. It’s the economic incentive for them to verify transactions, pack blocks, and maintain network security. Without this fee, no one would be willing to contribute resources to operate the network, and the entire system would collapse.

Reason 2: Prevent malicious behavior and traffic congestion

Imagine if sending packages was completely free—what would happen?

A “troublemaker” might appear, doing nothing but for fun, sending millions of empty boxes all day long, clogging up all the vehicles and routes of the courier network. As a result, you, who need to send an important package, might never get a courier to pick it up.

This behavior is called “Spam Attack” in the network world.

The Gas Fee mechanism perfectly solves this problem. It stipulates that every operation, even just sending a tiny empty envelope, must pay a small fee. This minimal cost is almost imperceptible to normal users, but for those trying to send millions of spam transactions, the cost becomes astronomical. This effectively prevents malicious network congestion.

Dissecting Gas Fees: What are they made of?

Now you understand why paying is necessary. But when you see Gas settings in your wallet, you might still be confused because of two terms: Gas Price and Gas Limit.

Don’t worry, let’s continue with the “courier” analogy to break them down:

1. Gas Price – How much are you willing to pay per unit of “gasoline”?

What is it? It’s the price you’re willing to pay for each unit of computational work.

What can it be compared to? It’s like the “price per liter” of gasoline used by the courier vehicle. This price isn’t fixed; it fluctuates in real-time like the stock market.

Why does it fluctuate? Because the courier network has “peak hours” and “off-peak hours.” Late at night, when there are fewer vehicles on the road (network is idle), gasoline prices are low. But during rush hours, like 5 PM (say, during a hot NFT drop), everyone is rushing to send packages, and couriers are in high demand. Gasoline prices then soar. The higher the bid, the sooner the courier will serve you.

Its unit: Usually measured in Gwei, which is a tiny unit of ETH. You can think of it as the “yuan/liter” price of gasoline.

2. Gas Limit – How much fuel can this trip consume at most?

What is it? It’s the maximum amount of Gas you’re willing to spend on this transaction.

What can it be compared to? It’s like pre-setting the “maximum fuel” for the courier’s vehicle before departure.

Why is it needed? Different tasks consume different amounts of fuel.

Simple tasks: For example, a straightforward transfer from point A to B, with a fixed route, usually consumes about 21,000 units.

Complex tasks: For example, interacting with a complex DeFi protocol, where the courier needs to visit multiple places and fill out several forms. This process consumes much more fuel and is harder to estimate precisely.

An important rule: Gas Limit is just an upper bound. If the task completes and the actual gas used is less than the limit, the remaining gas is automatically refunded. But if you set the limit too low, and the vehicle runs out of fuel halfway, the “delivery” fails, and the package is returned. Worst of all, even if it fails, the gas already consumed is not refunded!

Final formula: Your actual total Gas fee = Actual Gas used × Gas Price (Total Fee = Gas Used * Gas Price)

As a beginner, what should I do?

Hearing all this, you might feel a bit overwhelmed: “It’s so complicated, how do I set it?”

Don’t worry! Most wallets, like MetaMask, are very smart. They will automatically estimate and set a reasonable Gas Price and Gas Limit based on current network congestion.

Usually, you only need to do one thing: choose from “Low,” “Medium,” or “High” speed options provided by your wallet, depending on how urgent your transaction is.

Not in a hurry? Choose “Low,” save some money, and wait a bit longer.

Normal? Choose “Medium” (Market), and go at the market rate for normal speed.

Very urgent? Choose “High” (Aggressive), pay a bit more, and “cut in line” for the fastest processing.

Conclusion: Fuel driving the world

Let’s summarize.

Gas fee is definitely not an unnecessary, annoying “toll” in the blockchain world. It’s the vital blood that keeps this decentralized economy running.

It uses a clever economic game to fairly compensate network contributors while effectively maintaining network smoothness and security.

So, next time you see “Gas Fee” in your wallet, I hope you won’t feel confused anymore. You can think of it as a drop of fuel you add to this grand, open, permissionless “world computer.” It’s these countless drops of fuel that gather into the mighty power driving the entire Web3 forward.

**$GAS **