Why do you need ETH for transactions on Ethereum?

Gas and Computational Resources

1. Every operation on the Ethereum blockchain consumes computational power, storage, and bandwidth. These resources are finite and must be allocated fairly across all users.

2. ETH serves as the native fuel that powers this allocation mechanism. Without ETH, nodes would have no incentive to validate or execute transactions.

3. The gas system translates abstract operations—like sending tokens, deploying contracts, or updating state—into quantifiable units measured in gas.

4. Each gas unit carries a price denominated in ETH, known as the gas price. This creates a market-driven fee structure where users bid for priority inclusion in blocks.

5. Miners or validators select transactions with higher gas prices first, ensuring network responsiveness during congestion while preventing spam attacks.

Economic Security and Attack Deterrence

1. Requiring ETH for every transaction introduces a real cost to interacting with the network. This deters malicious actors from flooding the chain with low-value or infinite-loop operations.

2. Smart contracts can contain complex logic that may unintentionally consume excessive resources. ETH-based fees act as a built-in circuit breaker against runaway execution.

3. Without such a mechanism, attackers could deploy contracts designed to stall block production or exhaust node memory, undermining consensus integrity.

4. The economic model ensures that anyone attempting denial-of-service behavior must expend increasing amounts of ETH, making large-scale disruption prohibitively expensive.

5. Even legitimate developers must optimize code for gas efficiency, reinforcing disciplined engineering practices across the ecosystem.

Decentralized Incentive Alignment

1. Validators on Ethereum Proof-of-Stake rely on ETH staking and transaction fees as primary income sources. These rewards fund hardware, infrastructure, and operational costs.

2. Fee revenue is distributed proportionally based on validator performance and uptime, creating direct alignment between network health and individual profitability.

3. Users who pay higher fees contribute more to validator earnings, which in turn strengthens long-term participation and node diversity.

4. ETH’s role extends beyond simple payment—it functions as a governance-weighting asset in certain protocol upgrades and layer-2 fee settlements.

5. Transaction fees collected in ETH are not destroyed by default; they flow into validator wallets, sustaining the decentralized infrastructure without centralized treasury control.

State Transition Enforcement

1. Ethereum does not process transactions in isolation. Each one triggers changes to global state—balances, contract storage, event logs—and these mutations require verification.

2. ETH payments ensure that only authorized state transitions occur. A transaction without sufficient ETH is rejected before any state change begins.

3. Nodes verify both signature validity and available balance before accepting a transaction into the mempool, enforcing strict pre-execution checks.

4. This prevents invalid or underfunded operations from consuming processing time or propagating through peer-to-peer networks.

5. State changes are irreversible once confirmed, so ETH acts as a binding commitment token—guaranteeing intent, capability, and accountability at the protocol level.

Frequently Asked Questions

Q: Can I use stablecoins or other tokens instead of ETH to pay for gas?No. Only ETH is accepted for gas fees on Ethereum mainnet. Layer-2 solutions sometimes support alternative fee tokens, but base-layer settlement remains ETH-exclusive.

Q: Why can’t Ethereum just charge fees in USD or another fiat currency?Integrating external pricing mechanisms would break permissionless access and introduce central points of failure. ETH provides a trust-minimized, censorship-resistant unit of account native to the protocol.

Q: Is it possible to send ETH without paying gas?No. Even transferring ETH requires computational work—signature verification, balance updates, nonce increments—all of which consume gas and therefore demand ETH payment.

Q: What happens if my transaction runs out of gas?The transaction fails and reverts all state changes, but the gas already consumed is forfeited. The ETH paid for used gas goes to the validator as compensation for computation performed.