#GasFeeImpact

What are Gas Fees?

Before we dive into the heart of the matter, it is essential to clarify what gas fees are. Broadly, gas refers to the computational power needed to execute a particular transaction or contract on the network. This computational power is not free; hence we have "gas fees". These fees are paid to network validators, who validate and record transactions on the blockchain.

Gas fees play a crucial role in maintaining the integrity of blockchain networks. First, they act as an incentive for validators to accurately process transactions and keep the network secure. Without this incentive, validators do not have an economic reason to lend their computational power to the network.

Second, gas fees help prevent network spamming. If transactions were free or extremely cheap, bad actors could flood the network with meaningless transactions, causing unnecessary congestion and potentially grinding the network to a halt.

While gas fees can technically be categorized as "network fees", they are not synonymous in most blockchain-related discussions. Network fees usually refer to transaction costs on non-smart contract blockchains like Bitcoin. These fees compensate miners for securing the blockchain, similar to gas fees. However, they are not associated with executing smart contracts or Web3 dApps, unlike gas fees.