Gas
In short: Gas is the transaction fee on the Ethereum network. Strictly speaking, gas measures how much computing work a transaction needs, and the fee you pay is…
Gas is the transaction fee on the Ethereum network. Strictly speaking, gas measures how much computing work a transaction needs, and the fee you pay is the gas used multiplied by the price per unit of gas, paid in ETH.
Why it matters
Every action on Ethereum, from a simple transfer to a complex DeFi trade, uses gas, so the fee depends both on how complex the action is and on how busy the network is. Gas prices are usually quoted in gwei, one billionth of an ETH. Each transaction pays a base fee, which is burned, plus an optional priority fee that goes to validators. A gas limit caps how much a transaction may use; if it runs out, the transaction fails, but the gas already consumed is still charged.
Example
A plain ETH transfer uses 21,000 units of gas. If the base fee plus the chosen priority fee comes to 20 gwei per unit, the fee is 21,000 multiplied by 20 gwei, which equals 420,000 gwei, or 0.00042 ETH. Sending an ERC-20 token or using a smart contract needs more gas, so it costs more at the same gas price.