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What is Ethereum gas and how is it produced?

What is Ethereum Gas?

Ethereum is a decentralized computing platform that supports the creation of applications based on smart contracts on a blockchain network Developers can create specific applications using the smart contract function supported by the Ethereum platform. However, these applications run not only on personal computers, but also on the Ethereum platform. The history of the execution of the application is recorded on the blockchain.

The problem here is that when a large number of people set up a complex smart contract, all of the smart contracts must be recorded on the blockchain while all nodes (blockchain network participants) run the application. This is resource intensive and can eventually overload the network. In response, Ethereum introduces gas to prevent overload of the network due to these transactions.

Ethereum gas is created to set fees in the process of transferring Ether (ETH) from Ethereum or executing a smart contract, verifying a transaction and recording it on the blockchain. In other words, it is a kind of fee concept. Gas can be set directly by the user who creates the transaction. Those who want to transfer Ether quickly will pay a high gas fee, and conversely, those who can transfer Ether slowly will pay a low gas fee, thereby preventing network overload.

How is gas bill calculated?

Gas cost can be calculated as 'gas price * gas limit' .

In general, the standard gas limit on Ethereum is 21,000 gas .

Gas price uses Gwei (Gigaway), a subunit of Ether, which is usually 1,000,000,000 Gwei = 1ETH .

For example, if the gas price is 10 Gwei, you can see that the gas price is 210,000 Gwei.

210,000 Gwei is 0.00021 ETH, so calculating 0.00021 * 1 ETH,

You can find out how much fee you have to pay to trigger a specific transaction on the Ethereum network.

Gas Cost = Gas Price (10 Gwei) * Gas ​​Limit (21,000) = 210,000 Gwei


EthGasStation makes it easier to calculate the cost of your transaction and you can figure out how much Gwei you need for gas fees.