How are network fees determined?
Network fees, commonly referred to as gas fees, are influenced by the principles of supply and demand within the mining community. Essentially, the cost fluctuates based on the network's activity level.
During periods of high traffic, when the volume of transactions is elevated, network costs tend to increase. This is because more users are competing for their transactions to be processed promptly, leading to higher fees.
Conversely, when the network experiences lower traffic and fewer transactions are being processed, the network costs decrease. This drop in cost is due to reduced competition among users for transaction processing. In summary, the demand for mining resources in relation to the supply of those resources at any given time directly impacts the network costs associated with cryptocurrency transactions.