The Bitcoin network uses a Proof-of-Work (PoW) consensus algorithm to validate transactions and create new blocks. This involves solving complex mathematical problems that require a significant amount of computational power and energy.
Miners compete to solve these problems, and the first miner to solve the problem gets to add a new block to the blockchain and is rewarded with newly minted Bitcoins and transaction fees. The transaction fees are included in each block as an incentive for miners to prioritize transactions with higher fees.
The high gas fees in the Bitcoin network are mainly due to the limited block size and the high demand for transactions. Each block can only contain a limited number of transactions, and as the number of transactions waiting to be processed increases, the competition among users to have their transactions included in the next block increases, leading to higher transaction fees.
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