Transaction fee refers to the fee charged for processing a transaction on a blockchain network.
It is paid by the user to incentivize the network’s validators to include the transaction in the next block. The fee is usually expressed in the network’s native cryptocurrency, such as Bitcoin or Ethereum, and its amount is based on the size of the transaction and the current demand for block space.
Transaction fees are an important aspect of the functioning of decentralized systems, as they help to ensure that the network remains secure and operates efficiently. They also prevent users from clogging the network with low-priority transactions, as they will have to pay higher fees to have their transactions processed faster.
The amount of the transaction fee can fluctuate depending on the network’s congestion, and it is typically higher during periods of high demand. Some networks, like the Ethereum network, have dynamic fee models that automatically adjust the fee based on network conditions, while others have fixed fees that are determined by the network protocol.