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Gas Meaning

Jan 1, 2023 | Updated Jul 18, 2023
Gas is the measurement unit for the amount of computational power required to complete a transaction on the Ethereum network.

What is Gas in Crypto?

In crypto, Gas is a pricing mechanism in the Ethereum network. It’s a special unit that measures the computational effort necessary to validate transactions and execute smart contracts, as well as launch decentralized applications (dApps), on the Ethereum blockchain. 

The amount of cryptocurrency users pay for this computational power is called the gas fee. These fees are then used to pay block rewards to the validator nodes.

What is Gas on the Ethereum Network?

Gas on the Ethereum Network is a measure of the amount of work (computational power) required to conduct a specific activity on the network. The amount of resources that a single transaction requires will influence the “gas fee” that users pay to complete the task on the EVM

Activities on the network that require gas include processing transactions, executing smart contracts, and launching dApps. Since every transaction on the network requires gas, each gas unit is assigned a gas fee. 

Put simply, gas is the amount of work and gas fee is the price paid for this work. This rate fluctuates according to supply and demand across the network, as well as the complexity of the activity. Typically, the network activities consume gas in small bits known as gwei, the smallest denomination of Ether – which is the native token on the Ethereum network. One gwei is equivalent to 0.000000001 ETH. 

The gas fees are paid to miners/validators as compensation for the computational power they provide to validate transactions and secure the network. This pricing mechanism guarantees that fees are charged in a fair and appropriate manner. Unfortunately, the lower the fees you pay, the more time your transaction will take to be processed. This is because validators prioritize transactions that earn them more, i.e., transactions that pay higher gas prices.

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