Ethereum (ETH): what is gas?

Gas is a concept that is unique to the Ethereum network. It is a kind of fuel (gas in English) that it is necessary to spend to carry out transactions on the blockchain. Where some cryptocurrencies charge fees in their native token, Ethereum has chosen to use this system.

Even if it does not seem easy to understand for a new user, we will see together that the logic behind this system has been well thought out and that this ultimately allows for fairer transaction fees.

Why did you set up the gas system?

On many cryptocurrencies, the transaction fees are fixed and therefore depend on the value of the digital asset. In this case, if ether is worth $10 and you have to pay 0.1 ETH to make transactions, then it would be $1 per transaction. But if Ether goes up to $1,000, then the fee would be $100, something very few people would pay.

With its gas system, Ethereum has decorrelated the price of transactions from the value of its ETH token. Thus, users are guaranteed to pay approximately the same for each transaction they will make on the network regardless of the value of ether.

Gas can be considered as a fuel used to pay miners. Its value depends on several factors, the most important of which is the complexity of the operations to be carried out. Thus, a simple transfer of ethers from one person to another does not require too much work, while the realization of a smart contract requires significantly more resources.

An analogy can be made between an Uber Eat driver who delivers a meal on a scooter and a moving truck who has to transport a lot of furniture over a long distance. As you can imagine, the gasoline budget is not the same in these two cases.

What is the gas limit?

The gas limit is the maximum limit that a user is willing to pay to complete a transaction. It is important to set a limit that is neither too low nor too high. Indeed, if the limit is too low, there is little chance that a miner will agree to process the transaction.

In case the limit is too high, it can be problematic if a bug appears or if you do something wrong. In this case, you may then spend way too much money or, worse, your transaction will fail and the money spent on gas will be lost forever.

Many applications nowadays set limits by default so that novice users don’t make too many mistakes when setting the gas limit. However, it is always possible to decrease or increase these values ​​according to your good will, but we advise you to be careful and not to risk making errors which could prove costly in the event of incorrect handling.

What is the gas price?

The gas price represents the price you are willing to pay for a unit of gas. This is measured in “gwei”, which represents 1 billion “wei”. To make an ether, it is necessary to have 1 billion “gwei”.

For people who do not really know how many gwei it is recommended to insert to make a transaction, it is possible to consult the Ether Gas Station website which provides an indication of the price it is recommended to use to complete a transaction in a very fast, fast or normal way.

Generally, if you are not in a hurry to complete a transaction, it is appropriate to use the number of gwei for a normal transaction. However, avoid going below this price because no miner may agree to process your transaction, or your transaction may never go through, and you may lose that money as a result.

Conclusion on Ethereum network gas

We hope that you now better understand the concept of gas which is specific to the Ethereum network. It’s a bit more complicated to understand than how transaction fees work on most other cryptocurrencies, but it’s a much fairer system in terms of the prices you pay to complete a transaction.

If you are a little lost on the amounts to insert to carry out a transaction, most of the current crypto services which allow you to carry out operations with ether indicate by default the recommended gas prices and the limit of it , which allows you to avoid making mistakes during your transaction.

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I discovered the world of cryptocurrencies in January 2018. Arrived at the worst time to invest, I have never stopped training since then and now share my knowledge in order to facilitate the adoption of cryptos.

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