Understanding Gas Fees
Why Do I Pay to Send Money?
If you’re new to crypto, one of the first confusing moments is this:
You go to send a token…
Your wallet pops up a message…
And suddenly you’re asked to pay a gas fee.
Why?
What is this fee?
Why is it sometimes high?
And why do you never see this fee when buying crypto on a centralized exchange like Coinbase or Binance?
Let’s break this down in the simplest, most practical way.
What Are Gas Fees?
Gas fees are the cost you pay to use a blockchain.
Whenever you do something that requires the blockchain to process and record your action such as:
sending a token
swapping on a DEX
minting an NFT
approving a smart contract
…the network’s validators need to do real computational work.
Gas fees pay them for executing and securing your transaction.
Think of it like paying for space on a global, shared computer.
Why Wallets Ask You for Gas Fees
When your wallet asks for gas, it’s simply telling you:
“The blockchain needs a small fee to include this transaction in the ledger.”
This fee does not go to your wallet app or to Coinbase/MetaMask.
It goes directly to the network’s validators.
You pay gas any time the blockchain itself needs to update something on-chain.
Why You Don’t Pay Gas Fees on Centralized Exchanges
This is a common beginner question and a very important one.
When you buy or sell crypto on a centralized exchange (Coinbase, Binance, Kraken, etc.), you are not actually interacting with the blockchain.
You’re interacting with the exchange’s internal database.
Here’s the key difference:
On-chain actions require gas.
CEX actions are internal and do not touch the blockchain.
When you buy BTC or USDC on Coinbase:
Coinbase updates your database balance, No blockchain transaction is made, No validator needs to process your action. Therefore, no gas fee is required
You only pay gas when you withdraw crypto from the exchange to your wallet, because that is when an actual blockchain transaction happens.
Inside the exchange = no blockchain = no gas.
Outside the exchange = on-chain = gas required.
This is why fees suddenly appear when you start using non-custodial wallets.
When You Are Asked to Pay Gas Fees
You only pay gas when your action touches the blockchain directly.
You pay gas when you:
send tokens from your wallet
swap tokens on a DEX
approve tokens for DeFi use
mint or list NFTs
interact with smart contracts
bridge assets to another chain
You do not pay gas for simply holding crypto or watching your balance change with price movements.
Why Ethereum Gas Fees Are Higher
Ethereum is extremely secure and highly used. That means:
millions of users
limited blockspace
high demand
More people trying to use the network → higher fees.
Ethereum is like a highly trusted, crowded 4-lane highway.
Everyone wants to use it.
When demand spikes (NFT mints, meme coin mania, bull markets), gas goes up sharply.
This isn’t because Ethereum is “bad.”
It’s because it’s popular, secure, and decentralized — and these features cost blockspace.
Why Solana Gas Fees Are So Cheap
Solana was designed differently.
It has:
higher throughput (more transactions per second)
extremely cheap fees (fractions of a cent)
faster confirmations
more capacity
Solana is like a massive 50-lane express highway.
Even during peak usage, traffic flows smoothly.
This makes it ideal for: payments, trading, microtransactions, high-volume applications, AI agent activity.
Ethereum focuses on deep security and decentralization.
Solana focuses on speed and efficiency.
Different tools. Different strengths.
Practical Tips for Managing Gas Fees
Keep a little ETH or SOL in every wallet
You cannot move tokens if you don’t have:
ETH for Ethereum
SOL for Solana
Even if you have $10,000 in tokens, you can’t send them without a small amount of the chain’s native asset to pay gas.
Recommended:
Hold 0.01–0.05 ETH in Ethereum wallets
Hold 0.2–1 SOL in Solana wallets
This prevents getting stuck.
Instead of Ethereum mainnet, beginners often save a lot by using: Solana, Base, Arbitrum, Polygon, Avalanche.
These networks are significantly cheaper.
Transact during low-traffic hours
Ethereum is often cheaper when the U.S. is offline:
early mornings
late nights
weekends
This can reduce fees dramatically.
Final Thoughts
Gas fees confuse beginners, but once you understand the reasoning, it makes sense:
CEX trades don’t touch the blockchain: no gas
Wallet transactions are on-chain: you pay gas
Ethereum is secure but crowded: higher fees
Solana is fast and scalable: tiny fees
Keeping small amounts of ETH or SOL in your wallet prevents headaches
Gas isn’t a penalty. It’s simply the cost of using a decentralized global network that nobody controls.
Not Financial Advice