What Is Ethereum Gas — Exscudo Blog

Basic Definitions

  • Ethereum is a blockchain platform created by Vitalik Buterin for running decentralized applications (Dapps). Each Dapp is based on a collection of smart contracts. Executing a smart contract or making a transaction is not free. To do it, a user pays a certain price in ethers (ETH).
  • Ether (ETH) is the in-house cryptocurrency and means of payment. Let’s see it as digital oil, blood, or another vital substance.
  • Gwei (another or nano) is a tiny fraction of Ether. More precisely, 1 ETH is 1 billion Gwei.
  • Gas is a special measurement unit. When you want the system to do some work, you offer a certain amount of gas to its miners. If the task is urgent, you can boost the price of gas. Miners love it.

Ethereum Cryptocurrency (ETH) and Its Price

Gas: Basic Parameters

What Is Ethereum Gas Limit and How It Works

Setting Gas Limit: High or Low?

Why You Need Gas Limits

What Is Ethereum Gas Price and How It Works

Setting Gas Price: High or Low?

Why Gas Is Important

What Is Ethereum gas: Key Provisions

  • Gas is not a currency/token. You don’t trade it on an exchange and cannot use it in a way you use regular cryptos. It’s just a metering unit, a smart method to determine miners’ fees.
  • Though you set a price in gas, you still pay transaction fees in ETH, as prices for a gas unit are expressed in Gwei. Normally, they range between 5 and 21 Gwei per unit.
  • The gas limit depends on the amount and complexity of the work miners have to perform to process your transaction. The system defines gas limits for different operations, making things easier for users.
  • The total transaction fee you pay depends both on your gas limit and the gas price. Roughly speaking, the gas price is equivalent to the hourly wage you offer to miners, while the gas limit is the max amount you are ready to pay them.
  • When you set a higher than average gas price, your transaction goes to the front of the line and gets processed rapidly. In some cases, it’s a waste of money.
  • If your gas price is too low (much below the average), no miner will ever pick your transaction from the pool.
  • Increasing your gas limit makes no sense if you want your transaction to be processed faster. It means no extra money for the miners — the unused gas remains in your wallet just like the unused fuel remains in your tank.
  • When the processing of your transaction takes more work than you are ready to pay for, the transaction fails (“out of gas” error). Note that in this case, you don’t get your money back because the work has already been done.

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