The gas fee is a fee that the user must pay to offset the computing energy used by the network, which is required to process a transaction on the Ethereum blockchain. Gas fees are similar to processing fees that credit cards may incur to transfer money to various accounts or pay bills.
NFTs HAVE TRANSFORMED THE DIGITAL ART WORLD making it possible for anyone to sell their work for substantial amounts of money. You don’t necessarily have to be an artist to sell NFTs. Anything can be sold as an NFT including music, drawings, GIF, tweets and even a selfie can be sold for millions of dollars.
Calculating Gas fees
Starting from the price of related crypto assets today, the complexity of the transaction, and the number of people transacting.
- Gas is measured in GWEI. GWEI is the unit of gas used on the Ethereum network.
- One GWEI is worth one-millionth of Ether or 0.000000001 ETH.
- The minimum amount of gas required to process a transaction is 21,000.
So, to calculate the NFT gas fee is the minimum amount of gas multiplied with the gas price in GWEI. An NFT is thus created, or in crypto lingo say “minted”, to get exclusive ownership rights. NFTs can have only one owner at a time. Consider gas fee like a ‘processing fee’ you pay to your bank for every transaction you make online. It is essentially the computing power that you utilise and pay for.
Gas Units will always be 21,000 (the minimum gas required to process a transaction on Ethereum) multiplied by Base Fee (it changes constantly, and can be monitored on etherscan.io), and a tip which is paid to miners for helping process the transaction. With a gas limit of 21,000, base fee of 35 gwei (at the current rate) and a tip of 20 gwei, the total fee is 11,55,000 gwei. Now, convert this unit to ETH by multiplying it by 0.000000001, which is equivalent to 0.001155 ETH or $3.71. The cost to mint an NFT ranges widely, all depending on the base fee. When converted to fiat, the cost can vary from $1 up to $500 or more. Creators have the option to choose from several NFT marketplaces, with each platform charging different fees. Notably, there is no option to skip gas fees.
These markets come with some cost, therefore it is important for artists to understand the costs of minting and selling, otherwise they could lose money. To make it big on blockchain, it is recommended for all the users to know the tricks of the trade to lower the transaction cost or popularly known as ‘gas fee’.