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Why Gas Fees Needed for a Healthy Blockchain Ecosystem

Written by: Khairul Haqeem, Journalist, AOPG.

Gas costs, or transaction fees, are becoming increasingly important as blockchain technology gains traction. These fees are crucial to the process of validating transactions and protecting the blockchain’s security, and they are required for the network to function. Now, let’s embark on a brief journey to explore why and how everything is connected.

Fuelling Blockchain – The Price for Security

Gas fees are the payments made by users to network validators for processing their blockchain transactions. More complicated transactions require more processing power and thus a higher gas charge, which is why these fees are proportional to the complexity of the transaction.

To ensure the integrity and security of the blockchain and encourage network validators to handle transactions correctly, gas fees are a crucial component of the blockchain environment. Blockchain transactions are authenticated by a decentralised network of users known as “validators,” who run specialised software, and gas fees are payments made from users who require blockchain services to those who provide the processing power necessary to perform those services.

It might be useful to compare gas fees to the cost of the fuel used to power a vehicle. Gas fees incentivise validators to handle transactions and keep the blockchain secure, much like a vehicle needs gas to run. And just as gas prices can change depending on factors like the type of car and the distance driven, so too can transaction fees change based on factors like the quantity of computational power needed to process the transaction.

The Cost of Trust in Decentralised Systems

To keep cryptocurrency networks safe and secure, gas fees are essential. Gas fees discourage malevolent actors from manipulating the blockchain or conducting fraudulent transactions by encouraging validators to process transactions accurately.

In addition, gas fees aid in the effective distribution of blockchain ecosystem resources. Participating validators are required to purchase specialised computer hardware and stake a predetermined quantity of cryptocurrency into the network. Gas fees guarantee the efficient use of these resources and provide incentives for validators to ensure the stability and safety of the blockchain.

PoW, Gas Fees, and Mining: A Trio of Blockchain Vitality

Many blockchain networks out there, rely on the Proof-of-Work (PoW) agreement, which is inextricably linked to gas fees. Users in PoW blockchains pay gas fees to miners in exchange for transaction validation. To win the block reward and any associated transaction fees, miners compete with one another and use specialised processing hardware to create random codes called hashes.

In order to encourage miners to handle transactions reliably and fight for the block reward, gas fees are crucial. If miners didn’t have to pay gas fees to use their specialised hardware and vie for the block reward, the blockchain’s security and integrity would be compromised.

An important update to the Ethereum network, called “The Merge,” was implemented in September 2022. After the Merge, Ethereum became a Proof-of-Stake (PoS) network. Staking is the process by which users keep the blockchain running by locking up ETH instead of solving complicated math issues to “mine” the next block. The update, however, had no effect on gas fees. This does lead to another question, “if consensus does nothing to the gas fees, then what does?” We promise to explore this in future investigations.

Incentives for network validators to handle transactions reliably and keep the blockchain secure and intact are provided by gas fees, which are an integral part of the blockchain environment. Gas fees are essential for validators to be compensated for their work ensuring the security and integrity of the blockchain, and for the effective allocation of resources within the blockchain network as a whole. Anyone interested in getting in on the ground floor of the quickly developing field of blockchain technology must have a firm grasp on how gas fees function in the system.

So, stay tuned for the next piece on gas fees!

Khairul Haqeem

Khairul is proficient in writing tech-related pieces for the Asia-Pacific region. Some of his most notable work is focused on emerging technologies, data storage, and cybersecurity. His prior experience includes stints as a writer for two iSaham sites: and Before beginning his writing career, he worked in the field of education. Aside from studying engineering at the International Islamic University Malaysia, he has also worked as a subtitler for Iyuno Global, serving clients like Netflix. His specialities are: • Disruptive Tech. • Data Storage. • Cybersecurity. • Decentralised Tech. • Blockchains.

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