Crypto 101 · Crypto basics
Crypto Network Fees: Why They Exist and Why They Vary
Abstract
Network fees pay the miners or validators who process transactions and protect the network from spam. Because block space is limited, fees rise when many people want to transact at once. We explain the fee models of Bitcoin-style, Ethereum and Solana networks and what to check before you send.
Keywords: network fees, gas, transaction fee, priority fee, base fee
1. In plain English
Every blockchain has limited space in each block. A network fee is what you pay to get your transaction included. It also makes spam expensive: if sending were free, anyone could flood the network. The fee does not go to Scrypt Wallet or any wallet company; it goes to the people or computers securing that network.
Fees are set by supply and demand. When many people want to send at the same moment, those willing to pay more go first. When the network is quiet, fees are close to nothing. That is why a payment can cost a fraction of a cent one hour and much more another.
2. Fees by network
Table 1. How fees work on the network families Scrypt Wallet supports.
| Network | How the fee works | Who receives it |
|---|---|---|
| Bitcoin, Litecoin, Dogecoin | Fee based on transaction size in bytes; higher fee = faster inclusion [1] | Miners |
| Ethereum | Gas: a base fee that is burned plus an optional tip [2, 3] | Base fee burned; tip to validators |
| Solana | Small base fee per signature plus an optional priority fee, paid in SOL [4] | Validators, with part of the base fee burned |
3. Go deeper: why size, not amount
On Bitcoin-style chains, the fee depends on how many bytes your transaction takes up, not on how much money you send. A transaction that spends many small inputs is larger and therefore costs more than one that spends a single large input, which is one reason how UTXOs work affects your fees.
On Ethereum the base fee adjusts automatically with demand and is destroyed rather than paid to anyone, which ties network usage to the coin's supply [3]. Solana keeps the base fee small and fixed per signature so ordinary transfers cost a tiny amount [4].
4. Before you send
Make sure you have some of the network's own coin for fees, including when you are sending a token: a token on Solana still needs SOL. If a fee looks unusually high, wait a few minutes or check whether the network is congested.
5. In Scrypt Wallet
The wallet shows the fee for a send before you confirm it. If you hold Solana tokens, keep a little SOL so you can always move them.
References
- Bitcoin Wiki contributors (2010). Transaction fees. Bitcoin Wiki: how transaction fees work and why they are paid to miners. https://en.bitcoin.it/wiki/Transaction_fees
- ethereum.org (2023). Gas and fees. Ethereum developer documentation: transaction fees, the base fee and tips. https://ethereum.org/en/developers/docs/gas/
- Buterin, V., et al. (2019). EIP-1559: Fee market change for ETH 1.0 chain. Ethereum Improvement Proposal introducing the burned base fee. https://eips.ethereum.org/EIPS/eip-1559
- Solana Foundation (2024). Transaction fees. Solana documentation: every transaction pays a small base fee per signature, plus an optional priority fee, in SOL. https://solana.com/docs/core/fees
Common questions
Who receives a network fee?
On proof-of-work chains, miners. On proof-of-stake chains, validators; Ethereum also burns part of every fee, removing it from supply.
Why do I need SOL to send a Solana token?
Every Solana transaction pays a small fee in SOL, whichever token you are moving.
General education, not financial, tax or legal advice. Figures are schematic. Protocol parameters are cited to primary sources and can change; verify against the linked source before relying on them.