On Ethereum, a nominal fee is required to be paid for the execution of all smart contracts and transactions. This fee is known as Gas.
Technically, Gas is the base unit on the amount of computational exertion needed to carry out a smart contract or operation. More gas would be required to fulfil a more complex operation.
Payment for gas fees are made completely in ETH.
Gas prices may fluctuate now and then depending on the system demand. If more people are interacting on the Ethereum system, either executing operations of smart contracts or ETH transactions, the price of Gas can increase as a result of limited computing resources on the system.
Equally, Gas market price would decrease when the system is underutilized.
Settings on Gas fees can be done manually. Where the system is congested as a result of high utilization, validation of transactions will be prioritized based on those that have the highest gas fee.
Transactions that are validated will be concluded and put in the blockchain. Transactions with associated lower gas fees will be queued up and may take longer to complete.
Hence, transactions with associated below-average gas fees can take a far longer time to complete.
Note: The price of Gas is usually denoted in gwei; where 1 gwei = 0.000000001 ETH
Assuming token transfer through execution of a smart contract requires 21,000 gas units.
Also, assuming the average gas price market rate is 3 gwei.
21,000 gas x 3 gwei = 63,000 gwei = 0.000063 ETH
This means that the payment of a gas fee of 0.000063 ETH will be required to process your transaction and validate it in the system.
