Glossary
Gas fee
The price in ETH a user pays to have a transaction included in an Ethereum block — denominated per unit of computation, not per transaction.
A gas fee is what an Ethereum transaction pays for the compute, storage, and bandwidth it consumes. Unlike Bitcoin, where fees are roughly proportional to transaction byte size, Ethereum charges per unit of computation — every operation in the Ethereum Virtual Machine has a fixed gas cost.
The total fee is gasUsed × gasPrice. gasUsed is determined by the work the transaction actually performs (cheap for a transfer, expensive for a complex contract call). gasPrice is bid by the user and tracks network congestion in real time. Since the EIP-1559 upgrade in 2021, fees are split into a base fee (burned, removing ETH from supply) and a priority tip (paid to validators).
Gas exists to price the public good of block space and to bound the work a single transaction can demand. Without it, a malicious contract could trap a node in an infinite loop. The trade-off: when demand spikes, gas fees can make small transactions uneconomical — which is much of the motivation for Layer 2 rollups.