Ethereum gas cost is calculated based on the number of computational steps required to execute a transaction or contract. This is why gas cost is often referred to as “transaction fees”.
The higher the gas cost, the more computationally intensive the transaction, and thus the more expensive it is to execute on the Ethereum network.
The gas cost of a transaction is denominated in gwei, which is a fraction of an ETH. The current average gas price is around 20 gwei.
This means that the average transaction costs 0.02 ETH to execute.
The gas cost of a transaction can be divided into two parts:
– The base fee, which is a constant amount charged for every transaction regardless of its complexity.
– The variable fee, which depends on the complexity of the transaction and is thus variable.
The base fee is currently set at 21000 gas and covers the execution of a simple transaction like sending ETH from one address to another. The variable fee is charged per computational step and depends on the operations performed by the transaction.
For example, a contract interaction that reads data from storage will have a lower gas cost than a contract interaction that writes data to storage.
The total gas cost of a transaction is then calculated by adding the base fee to the variable fee. So, for example, if a transaction has a base fee of 21000 gas and a variable fee of 1000 gas, then the total gas cost of the transaction would be 22000 gas.
One important thing to note is that the sender of a transaction pays for all the gas used by that transaction. This includes both the base fee and any variable fees incurred by executing code or storing data on Ethereum’s blockchain.