Do you know what Ethereum gas
Ethereum gas is a unit that measures the cost of computational effort such as completing a transaction or executing a smart contract.
Priced in small denominations of Ether (ETH) called gwei
gas is used to allocate resources to the Ethereum virtual machine so contracts can self-execute easily.
Everything you do in the Ethereum network costs gas and this gas translates to ETH.
The Ether value will show the actual incentive a miner gets in exchange for completing a transaction within the network.
Hence, gas is what miners consider when choosing whether or not they’ll do the computational work.
As the one who’s requesting for computational work, you set the gas price to show how much you’re willing to pay
for the requested work. The amount of gas you need depends on two major factors:
The complexity of your contract
The speed you want it finished
If you’re willing to wait longer for a transaction to be completed, you can pay less gas.
If you want the transaction to be completed as soon as possible, then you’ll need to pay more gas.
Why does Ethereum use gas?
Like any other network, Ethereum is vulnerable to overloading because of heavy usage and high traffic.
Each operation requires a number of gas units to complete a transaction. The network can only compute a limited number
of operations at a given time, and if left unattended, the number of requests can overwhelm the system and overload it.
Miners get to pick which transaction they want to work on. However, as there are so many offers on the network,
it’s hard for miners to choose. As a result, the network gets flooded with requests and time is wasted.
To manage traffic and prevent the network from overloading, the gas system that consists of gas price and the gas limit was created.
Instead of choosing at random, miners now rely on a user’s set gas price and gas limit to pick which transaction they would
like to work on. This helps miners decide how to prioritize their work and optimize their working time.
The gas shows the incentive the miner will receive in exchange for their service. The more complex the transaction,
the more time it’ll take to complete. As a result, fees are higher to compensate for the intensive work.
The opposite goes for simple transactions.
All in all, the use of Ethereum gas can be summarized in these points:
Keeps the network from overloading by allocating resources
Helps miners decide how to prioritize their work
Keeps transactions from being too expensive
Gwei, gas limits and gas price
In understanding Ethereum gas, you have to know about its three main aspects: gwei, gas limit, and gas price.
The transaction cost is the result of all three aspects.
Gwei is a small unit of ETH used in calculating the operation cost and the miner’s incentive.
It’s the unit attached to each gas unit, making it convertible to monetary incentives.
1 ETH is worth 1 billion gwei.
Gwei is used to determine how much you’re willing to pay a miner in exchange for doing an operation.
This means that the higher the fee, the more appealing it is to miners and the faster your operation will be done.
Gas limit is the range of gas units required in accomplishing all the necessary instructions in a transaction.
It’s your guess at the total amount of work you’re requesting. This is how you provide fuel for all the necessary operations
needed to finish your transaction. The one who wants the transaction completed is the one who sets the gas limit.
Every single transaction done in the blockchain requires a certain number of gas units to go through.
Setting the gas limit
Basically, the more complex your transaction, the higher the gas limit. Finding out the specific gas limit can be hard,
but there are applications or websites (e.g. ETH Gas Station and Ganache) that help determine the limit so you won’t
have to do any computations for yourself.
Complexity ↑ = Computational work ↑ = Fees ↑ = Gas limit ↑
You might think that it’s better to set the Ethereum gas limit high so you won’t risk failure, but in reality, it’s not.
Every block on the Ethereum blockchain consists of a certain number of transactions with a maximum gas limit.
Setting the limit unnecessarily high for a simple transaction only consumes space in a block that
could’ve been occupied by other transactions. Typically, 21,000 gas is enough to satisfy most transactions.
For more complex transactions, it can require a limit of 100,000 to 200,000 gas.
If the gas limit tells how much you’re willing to pay for a transaction, then Ethereum gas price is how much
you’re willing to pay per gas unit. The price of one unit of gas is expressed in ETH. When making an Ethereum transaction,
you specify your gas price denominated in Gwei together with a gas limit.
The average Ethereum gas price is determined by different factors on the network, including the demand for work.
The higher the demand, the higher the price of gas, though you get to decide the gas price of your transaction.
Remember - this is what miners consider when picking which work to do.
The average gas price is approximately 20 gwei or 0.00000002 ETH
. The price changes when there’s a high traffic
and demand in the network, and there are more transactions competing to be included in the next block.
Currently, the average gas price sits at 29.94
The gas limit you set determines the amount of gas you’ll give the miner to complete a transaction.
The average gas price is determined by the number of requested transactions, the number of transactions miners can handle,
and the cost to handle one transaction. To get the total transaction cost, multiply the gas price by the gas limit.
Ethereum as a supercomputer
Ethereum is regarded as a groundbreaking technology for decentralizing contracts, with gas being what makes these smart contracts possible.
It incentivizes miners and creates a system that prevents the network from overloading. With the gas concept and everything
that comes with it, the Ethereum network has certainly managed to maintain its status as a supercomputer.
Hopefully, it was useful. Let me know if you have thoughts or comments