Crypto transaction fees and Ethereum gas fees explained
There are usually three or four different fees hiding in one purchase. Here's each one, including how Ethereum gas really works.
When you buy or send crypto you may pay several fees: a network fee to the miners or validators who process the transaction, a trading fee to the exchange, a spread (the gap between buy and sell prices), and sometimes a withdrawal fee. Network fees rise when the network is busy.
The four kinds of fee
| Fee | Who gets it | Typical size |
|---|---|---|
| Network fee (gas, miner fee) | Miners or validators | From under a cent on some networks to many dollars on a busy Ethereum or Bitcoin |
| Trading fee | The exchange | Roughly 0.1%–1.5%; "instant buy" buttons are often the most expensive |
| Spread | The exchange or market maker | Built into the price; can be 0.5%–2% on simple buy screens |
| Withdrawal fee | The exchange, to cover the network fee | A fixed amount of the coin per withdrawal |
See all of them together with the true cost calculator.
How network fees work
Bitcoin: blocks have limited space, so you pay per unit of space your transaction uses, in satoshis per virtual byte (sat/vB). A typical simple payment is around 140 vbytes. At 10 sat/vB that's 1,400 sats.
Ethereum: every action uses a certain amount of gas (a simple ETH transfer uses 21,000), and you pay a price per unit of gas in gwei (a billionth of an ETH). Part of the fee (the base fee) is burned and the rest (the tip) goes to the validator. Fee = gas used × gas price.
Work out either one in dollars with the network fee calculator. For the mechanics, including how the base fee moves block by block and how to unstick a Bitcoin payment, see how network fees work.
Ethereum gas fees, step by step
Since the London upgrade in August 2021 (EIP-1559), an Ethereum fee has two parts per unit of gas:
- Base fee: set by the network, the same for everyone in a block, and burned (destroyed). Each block has a target size of half its gas limit. If a block is fuller than the target, the next block's base fee rises, by up to 12.5%; if it's emptier, it falls. That's why fees climb quickly during a rush and ease off afterwards.
- Priority fee (tip): an optional extra that goes to the validator, to get included sooner when blocks are busy.
Your wallet also sets two limits. The gas limit is the most gas the transaction may use; unused gas isn't charged. The max fee is the most you'll pay per unit of gas; if the base fee turns out lower, the difference is refunded.
A token swap uses 150,000 gas. The base fee is 1.8 gwei and you add a 0.2 gwei tip, so you pay 2 gwei per gas. Fee = 150,000 × 2 gwei = 300,000 gwei = 0.0003 ETH. Of that, 0.00027 ETH is burned and 0.00003 ETH goes to the validator. Multiply by ETH's price for dollars, or use the gwei to USD converter.
Why different actions cost different amounts: a plain ETH transfer is always 21,000 gas, but sending a token, swapping on a DEX or minting an NFT runs smart-contract code and can use several times more. The gas price (in gwei) is what changes with demand; the gas used depends on what you're doing.
Why layer 2s are cheaper: rollups bundle many users' transactions and post them to Ethereum together. Since the Dencun upgrade in March 2024 (EIP-4844) they can post that data in cheaper "blobs", which cut typical layer 2 fees sharply. See layer 2 networks.
Failed and stuck transactions: if a transaction runs out of gas or a contract rejects it, its changes are undone but the gas already used is still paid. A transaction stuck because its max fee is below the current base fee can usually be replaced by sending a new one with the same nonce and a higher fee; most wallets offer this as "speed up" or "cancel".
How to pay less
- Use an exchange's advanced or "pro" trading screen instead of the instant-buy button.
- Send when the network is quieter, often weekends, if it isn't urgent.
- Use a cheaper network or layer 2, if the receiver supports that exact network.
- Withdraw less often, in larger amounts, if the withdrawal fee is fixed.
If a transaction fails (for example, a smart contract rejects it), the network fee is usually still charged, because the network did the work.
Check what you learned
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Related reading: Rollups: optimistic vs. ZK, data availability and blobs · Layer 1 vs. layer 2 vs. sidechains · What is MEV? Transaction ordering explained
Frequently asked questions
Why are Ethereum gas fees so high sometimes?
Fees rise when many people want to use the network at once, because each block has limited room and users bid for it. The base fee rises automatically, by up to 12.5% per block, while blocks stay fuller than their target.
How are Ethereum gas fees calculated?
Gas used × (base fee + priority fee). A plain ETH transfer uses 21,000 gas; at 2 gwei per gas that's 42,000 gwei, or 0.000042 ETH.
What is the difference between gas limit and gas price?
The gas limit is the most gas a transaction is allowed to use; the gas price (base fee plus tip, in gwei) is what you pay for each unit. Unused gas isn't charged.
Where do Ethereum gas fees go?
The base fee is burned, removing that ETH from supply. The priority fee (tip) goes to the validator who includes the transaction.
What is gwei?
One billionth of an ETH. Gas prices are quoted in gwei to keep the numbers readable.
Why was I charged a fee when my transaction failed?
The network still did the work, so the gas used is charged: the base-fee part is burned and the tip goes to the validator.
Where to next
Sources
- Gas and fees (ethereum.org)
- EIP-1559: fee market change (Ethereum Improvement Proposals)
- EIP-4844: shard blob transactions (Ethereum Improvement Proposals)
- Transactions, Bitcoin developer guide
Written for beginners and checked against the sources listed. Last reviewed November 5, 2026. This page is educational and is not financial, tax or legal advice. How we write and check pages.