Why Gas Fees Isn't Really A Problem And Why It Is
Understanding The Intelligent Design.
Introduction
Context. That's the simple answer to summarize everything you're going to read in this article. To understand why gas fees aren't a problem for the Ethereum network as everybody thinks and why it is, we have to look at the context.
Further in this article, you'll come to understand why context plays an important part in how to look at the problem in a way that it doesn't become a problem anymore while reminding yourself that it is currently a problem.
Let's dive in.
What Is A Gas Fee?
A gas fee, also known as gas is a certain amount of monetary value paid in cryptocurrency by users of the network to a validator for the execution of a transaction made on chain.
This means that for every transaction a user makes that alters the state of the blockchain, they would have to pay a certain fee to have that transaction validated.
Why Is Gas Needed?
Gas fees are primarily used as a stimulant for validators as compensation for their computational power, and to encourage more validators on the network to ensure the network smoothly functions.
They are commonly paid when interacting with smart contracts; either to purchase an item, sell an item, or even send ether to someone. All of these operations influence the ledger of the network and therefore need to first be validated, and that's why users have to pay for them.
How is it calculated?
Gas fees are usually paid for in the network's local currency. For Ethereum, gas is paid for in one of the smallest denominations called gwei. One gwei is the equivalent of a billionth of an ETH or 0.000000001 ETH (10-9 ETH).
The gas fee of a transaction is calculated by deriving the cost of gas to be used in a transaction, multiplied by the cost per unit of gas (Gas Limit \ Gas Price per Unit)*.
When using most decentralized wallets, users are allowed to dictate exactly the maximum amount they are willing to spend for gas. This is known as gas limit and when you multiply gas price by gas limit you arrive at the total amount of gwei you are permitting Ethereum to spend for any transaction.
What Influences Gas Fees?
It is imperative to understand that gas fees can be influenced by several things. These things include but are not limited to:
Network congestion: Network congestion is the primary and most common influence over the gas fees of a transaction.
This congestion occurs when too many transactions flood the network at once and over a period of time.
The network experiences too many transactions than usual, and by the laws of demand and supply which govern the network's relationship with its validators, gas fees soar higher than usual to properly compensate the validators for their extra processing power.
Smart contract logic: This occurs when developers write code that requires the Ethereum Virtual Machine (EVM) to make lots of complex calculations etched into the smart contract as code.
The EVM is responsible for handling smart contract performance, which includes solving for calculations in these smart contracts. The more complex the calculation, the more gas is required by the EVM to solve it.
Why Are Gas Fees Not Seen As A Problem?
Despite the user sentiment of the high cost of fees, gas fees are an intentional feature by the developers of the Ethereum network. This is known as intelligent design.
Yes. Gas Fees exist on purpose and are an integral part of the structure of the Ethereum blockchain
A problem by definition is an unwanted or unwelcomed situation so the existence of gas fees cannot be classified as an unwanted feature, as it had been introduced by the developers as a part of the structure of the network. It is, in fact, part of the Ethereum blueprint.
What is intelligent design?
Gas fees are efficient for the following reasons;
Network security: The existence of gas fees keeps the network from being overloaded with transactions that could be malicious.
Ease network clogging: The Ethereum network has a limited block space, and by processing transactions with a higher gas fee first, the network manages transactions from its excessive users.
Effective decentralization: Because transactions need to be validated, gas fees exist to serve as incentives for these validators. To become a validator on the Ethereum network, you would have to stake some Ether (ETH) on the network so gas fees act as a means of acquiring profits for these validators with staked ETH, or else no one would take on the cost of being a validator.
Resource utilization: When users pay a higher gas fee than usual, they utilize the network in their favor as their transactions are likely to be processed faster than others. This proves that they value the services of the network, and appreciate the network processes their transactions faster.
Why are Gas Fees An Ethereum Problem?
Despite the intelligent design of gas fees, it is still very much a problem for user experience in the following ways:
Expensive Transactions: The most frustrating reason why users see gas fees as a problem is due to how insanely high the cost can be sometimes, and this discourages them from using the network at that particular period, leaving them with two options: to wait until the price simmers down or pay the high fees.
Network Favoritism: This occurs when validators choose transactions with higher gas fees to be processed first over the ones with lower incentives. This can be viewed as unfair play to the users, which doesn't create a great impression on a network said to be fair and decentralized for all.
Scalability Issues: High gas fees are a major hindrance to network scalability, as new users don't feel inclined to be onboarded on the network, and would prefer its alternatives with cheaper fees.
Impractical Microtransactions: When the demand for extra computational power from validators is high, a user could end up spending more on gas fees than the actual transaction they are trying to process. This is very impractical for the user.
Conclusion
There are a lot of mixed feelings among the users of the Ethereum network. The community is divided between the ratio of good and bad when it concerns gas fees, but the developers and the Ethereum Foundation have yet to make a statement regarding the numerous petitions on social media calling for lower gas fees.
It's uncertain if there is ever going to be a change in the current structure of things, but as the network continues to evolve, maybe users will receive the compensation they request.
Interesting links
In the meantime, there are several ways users of Ethereum could avoid spending too much gas for a transaction especially when they don't want to, see the link below as well as other great resources you could read:
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