A Brief Introduction of Gas, Gas Fee, Gas Price and Gas Limit in Ethereum Network

Gas Fee is not an unfamiliar term to any blockchain enthusiasts who have used blockchain applications like trading platforms, DApps, or crypto wallets before. It is a fee with which you pay the miners when making a transaction on the blockchain. 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.

Gas is like the “fuel” of Ethereum and it determines the normal operation of the ecosystem of Ethereum.

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.

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.

Explanation of Terminology

Gas
Gas is a unit of measurement to calculate the amount of computation needed for a particular operation.

Gas Fee
Gas Fee represents the miner fee for a particular action or transaction.

Gas Limit & Gas Price
Gas Fee is composed of two parts: Gas Limit and Gas Price.

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 (a minimum of 21,000).

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.

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.

For instance, assuming that the Gas Limit is 50,000 and the Gas Price is 20 Gwei. 50,000*20 Gwei=1000,000 Gwei, equals 0.0001Ether. It means that the sender is willing to pay 0.0001Ether for this transaction.

The latest version of qPocket has an advanced function for Gas. Let’s take a look at how to use that new Gas function.

Step1: Enter the wallet page, choose ETH, and you will be able to view more details.

Step2: Click “send” to enter the transaction page.

Step3: Three kinds of default values are shown here, including slow, average and fast.

If you click “advanced”, Gas Price and Gas Limit will appear and you can set up your preferred level for Gas Price and Gas Limit.

After setting up the levels, don’t forget to click “Generate Transaction” to complete the transaction.

Things you need to consider when setting up Gas Limit

1. Different transactions will generate different Gas costs.
2. Miners will stop executing the operation when Gas is run out
3. 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.
4. The sender always pays the miner fee even if the transaction is failed. 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.

After reading this article, we hope that you would gain a better understanding of Gas, Gas Fee, Gas Price, and Gas Limit! If you have more questions, please leave us a message below. Thanks!

Website: https://www.qpocket.io/

Telegram: https://t.me/qPocket_official

Twitter: https://twitter.com/qPocket_wallet

Medium: https://medium.com/@qPocket

Weibo ID: qPocket_wallet