On the Ethereum blockchain, when someone sends a transaction to someone else, they attach a fee to that transaction. The higher the fee, the more likely it is that their transaction will end up in a miner’s next block (the next batch of transactions that get processed). Every once in a while, miners will process these batches of transactions and post the new blocks to the chain.
The problem is, 2022 gas fees now cost a small fortune. What gives, and how can you save money on your next digital marketing blockchain transaction?
What are Gas Fees?
Let’s start with a quick explanation of what gas fees are. They do not refer to the amount of gas you use when driving your car. In fact, they don’t have anything to do with liquid fuel consumption or the environmental impact of crypto mining.
Rather, gas fees are the rewards given to miners for putting or executing transactions on the blockchain.
The gas fee is paid out to the miner that includes your transaction in a block, and is taken from the sum of money you sent with your transaction. That means that you can’t choose a specific miner to get your business – it’s all up to chance.
How Much Are Gas Fees Right Now?
Keep in mind that gas fees are constantly in flux, so always check prices before going ahead with your transactions.
Here’s a live gas fee tracker on Crypto.com.
Why Are Gas Fees So Expensive?
It’s simple – when the Ethereum network has a large backlog of transactions to process, gas fees rise to encourage miners to prioritise your transaction. By encouraging faster processing, your transaction will be more likely to get included in the next batch of transactions.
As more people send transactions, they compete for this limited space. With limited space and increased demand, the fee required for a transaction to be included goes up.
In short, miners can choose which transactions they will work on. Naturally, they’ll select transactions with bigger pay-outs, aka higher gas fees.
What happens if you set the gas fee too low?
If you set the gas for your transaction too low, it could get lost in limbo. It could be one of the many transactions that are ignored by miners.
Or, it might not even get picked up by a miner at all. Miners will only attempt to process transactions with the highest gas fees attached, so if you set your fee too low, it might just get stuck.
What happens when a transaction gets stuck?
When transactions are in limbo, wallet holders have to ask for a speed-up or cancel the transaction.
Over time, if no miner picks up your transaction in a block, you’ll need to ask for a cancellation. This will allow you to send the same transaction with a higher fee so it gets picked up by miners.
3 Ways to Save Money on ETH Gas Fees in 2022
Don’t worry – you can still save money on your next Ethereum transaction, even when fees are high. Here’s how to do that with digital asset management:
Tip #1: Time Your Transactions for Lower Fees
8AM to 1PM EST are the most expensive and busiest times for Ethereum transactions. The reason? Because this is when people in the US and Europe are most awake and at work.
Try transacting around 12AM to 4AM EST. During this time, the US is asleep, Asia is wrapping up its workday, and Europe is still preparing to go to work.
Tip #2: Batch Your Transaction Types for More Savings
Gas fees vary for different types of Ethereum blockchain transactions. Rather than send ten different transactions, batch your transactions together.
Tip #3: Use DApps That Offer Discounts
There are various decentralised applications (DApps) that offer gas fee discounts. That means you can use these apps instead of the Ethereum network to transact. The gas fee will be lower and your transaction will get included faster.
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