What Is Gas in Crypto and Why Does It Cost Money?

If you’ve ever used Ethereum or similar blockchains, you’ve likely come across the term “gas”. But what exactly is it — and why do you have to pay for it?

In this article, we’ll explain what gas is, how fees are calculated, and what you can do to save costs while transacting on blockchain networks.

What is gas?

Gas is the unit used to measure the computational effort required to execute transactions or smart contracts on a blockchain — especially Ethereum. Just like a car needs fuel to move, a blockchain needs gas to process operations.

Every transaction — from sending tokens to using a DApp — consumes gas. The more complex the operation, the more gas it needs.

What is a gas fee?

The gas fee is the actual amount of cryptocurrency (e.g. ETH or MATIC) that you pay for executing a transaction. It’s calculated as:

Gas Units (used) × Gas Price (per unit)

The gas price is dynamic and depends on network demand. During busy periods, fees can spike significantly.

Why do gas fees exist?

• Security: Gas prevents spam and ensures users pay for the resources they consume.
• Prioritization: Higher fees can incentivize validators to process your transaction faster.
• Compensation: Fees are paid to miners or validators for maintaining the network.

How can you reduce gas fees?

• Use networks with lower fees, like Polygon or Arbitrum
• Avoid high-traffic times (e.g. during NFT launches)
• Choose wallets or DApps that let you adjust the gas price manually

How does Floin handle gas?

Floin aims to make blockchain use as smooth and predictable as possible. On selected networks, Floin may cover part or all of the gas fees — or help batch transactions to reduce cost. Our platform clearly shows you all fees before confirming a transaction.

Understanding gas helps you avoid surprises, plan better, and make smarter decisions when interacting with crypto platforms.