What is gas, and why is "the network expensive today"?

Ethereum's real innovation was not a second currency. It was making the ledger programmable — allowing code, called a smart contract, to live at an address and execute whenever someone sends it a transaction. Unit 1's tokens, and Unit 2's approvals and rug pulls, are all consequences of that one change.

But arbitrary code on a shared computer creates an obvious problem: what stops someone writing an infinite loop and freezing the network for everybody? The answer is gas.

Gas is a meter, not a currency

Every operation the virtual machine performs has a fixed gas cost defined in the protocol — adding two numbers is cheap, writing to permanent storage is expensive. Gas is a unit of computational work, like a taximeter reading. You never buy gas or hold it.

Typical amounts:

• Plain ETH transfer: 21,000 gas — the protocol's flat minimum
• ERC-20 token transfer: roughly 45,000–65,000 gas
• A swap on a decentralised exchange: roughly 120,000–200,000 gas
• Deploying a contract: hundreds of thousands to millions

Your fee = gas used × gas price, and the price is quoted in gwei — one billionth of an ETH (10⁻⁹).

The two-part price (EIP-1559)

Since the London upgrade in August 2021, the gas price has two components:

• Base fee — set by the protocol itself, identical for everyone in that block, and burned: destroyed, paid to nobody. It rises when the previous block was more than half full and falls when it was less, moving by at most 12.5% per block.
• Priority fee (tip) — what you voluntarily add to be picked sooner. This goes to the block proposer.

Blocks target half the current gas limit and cap at the limit itself — 30 and 60 million while the limit sits at 60 million, where validators put it in December 2025, which it has not always done and need not tomorrow, because the limit is something validators vote on. When demand exceeds the target, the base fee climbs block after block — geometrically — until enough people stop transacting that demand fits.

The arithmetic, worked

Take an illustrative ETH price of $3,000 (look up the live figure yourself; the point is the ratio, not the dollar).

• Quiet network, 5 gwei, plain transfer: 21,000 × 5 = 105,000 gwei = 0.000105 ETH = $0.32
• Busy network, 80 gwei, same transfer: 21,000 × 80 = 1,680,000 gwei = 0.00168 ETH = $5.04
• Congested, 300 gwei, a 150,000-gas swap: 150,000 × 300 = 45,000,000 gwei = 0.045 ETH = $135

Read that carefully, because it is two changes at once: a heavier action and a busier chain. The same plain transfer moving from 5 to 300 gwei costs 60× more; it is comparing a 21,000-gas transfer at 5 gwei against a 150,000-gas swap at 300 that produces the 428×. Congestion alone is the 60.

So "the network is expensive today" means exactly one thing: more people want block space right now than a block can hold. It is a statement about congestion, not about the asset's price. Fees can spike while the price falls, and often have.

Two consequences that surprise people

Small transactions become uneconomic. Moving $20 of a token during congestion at a $40 fee is a loss the instant you sign. There is no minimum-fee protection and no warning that the transfer is not worth making.

Failed transactions still cost gas. If a transaction reverts or runs out of gas, the nodes did the computation anyway, so the fee is charged and nothing else happens. You are paying for the attempt, not the result — which is why a wallet showing a failed transaction with a real fee attached is working correctly.

Why the same asset costs different amounts on different networks

Layer-2 rollups execute transactions off the main chain and post compressed proofs or data back to it, spreading one settlement cost across thousands of transactions. This is why the same nominal action can cost dollars on Ethereum and cents on a rollup.

It also reconnects to Unit 2's warning: those are different networks, with different contract addresses for what marketing calls "the same token". Cheap and correct are separate questions, and sending to the right address on the wrong network still loses the funds permanently.

Try it now

1. Compute the fee for a 65,000-gas token transfer at 25 gwei: 65,000 × 25 = 1,625,000 gwei = 0.001625 ETH. The gas price is denominated in ether; what it costs you is not.
2. Price that same fee twice from the chart below — once at the year's high and once at the year's low. Measure the range to get both ends. Identical network conditions, identical gas price, two different bills; a fee quoted in the asset is a fee that moves with the asset.

3. On an Ethereum block explorer, open the gas tracker and note the current base fee, then open the latest block and read its gas used against the 60 million limit — you are watching the auction that sets that number. Finally, find any transaction with status failed and note that its fee is not zero. That single screen is the rule in one image.