Gas is the “fuel” of Ethereum and it determines the normal operation of the ecosystem of Ethereum. Here's everything you need to know about Gas, Gas fee, Gas Price, and Gas Limit.

1. All About Gas,
Gas Fee, Gas
Price and Gas
Limit
The “fuel” of
Ethereum
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crypto
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2. Gas is the “fuel” of Ethereum and it
determines the normal operation of the
ecosystem of Ethereum.

3. One example would illustrate what gas fee is
easily: when you make a transaction between
different bank accounts, you are obliged to
pay a service to the bank because the banks
provide you services.
Similarly, when you are making a transaction
through blockchain, miners help pack your
transaction and put them in the new block to
complete the transaction. During the process,
miners consume computing resources and
thus you pay a gas fee to them to
compensate for the resources consumed.

4. Terminology

5. Gas
Gas is a unit of measurement to calculate the
amount of computation needed for a
particular operation.
Gas is needed in the Ethereum network to
complete transactions, to execute smart
contracts, to launch DApps, as well as to pay
for data storage. If you want to send ETH or
ERC20 or to interact with the smart
contracts, you would use ETH to pay for the
Gas Fee.

6. Gas Fee
Gas Fee represents the miner fee for a
particular action or transaction.
Gas Fee is composed of two parts: Gas Limit
and Gas Price.

7. Gas Limit The Gas Limit is the maximum amount of Gas
that a user is willing to pay for performing an
action or confirming a transaction. Default
values of Gas Limit vary depending on the
time and on the kind of actions and can be
set up by the user. Notably, the amount of
Gas needed to complete a transaction
depends on the complexity of the
transaction. The more complex the
transaction is, the more computational
resources are consumed, and thus the more
gas is consumed.

8. Gas Price
The price of Gas (Gas Price) is the amount of
Gwei that the user is willing to spend on each
unit of Gas. Gas Price will influence network
miners’ speed to confirm transactions and put
them in the new block. The higher the Gas Price
the sender is willing to pay, the quicker that the
miners will confirm your transaction since the
reward of the miners is higher. On the contrary,
the lower the Gas Price the sender is willing to
pay, the longer the sender will have to wait. If
the transaction is not in a hurry, the sender can
economize money by setting a lower Gas Price.

9. Things you
need to
consider
when setting
up Gas Limit

10. Different transactions will generate
different Gas costs.
Miners will stop executing the operation
when the Gas runs out.
You can get the unused Gas back. You do
not have to worry about setting an
exceedingly high level for gas limit
because if there is any unused gas, it will
be returned immediately to the sender’s
account.

11. The sender always pays the miner fee
even if the transaction fails. If the amount
for the Gas Limit the sender indicates is
too low, then the transaction is
considered invalid and will be rejected
with an “Out of Gas” error, and the Gas
spent for computation will not be
returned to the sender. It is important to
understand that the sender always pays
the miners for the computation,
regardless of whether the transaction
goes through or not.

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