Ether Gas. Gas. Gas. What Is It?
I’m assuming you’re familiar with Gitcoin, smart contracts, but Gas is a new concept to you. I’ll cover that, how Gas prices are determined, what can cause them to fluctuate, and what may have caused a spike in Gas prices a short time ago. In about five minutes you should be able to determine the Gas price you’re willing and able to pay to have your smart contract processed.
Start the clock.
You: Reviewed a few bounties and you assume the full bounty is yours after you’ve completed the job. It’s not. Every job includes a smart contract that guarantees you get paid for the bounty after all work is completed. Someone has to process that smart contract. That someone like you would like to get paid for their time and efforts. The Gas that you offer is where that someone receives their compensation.
Sidebar: here’s a link to get some FREE Gas from the good folks at GitCoin. Make sure you come back to finish the article.
Not You: Please checkout these articles by Rahul Bishnoi and Shubham if this isn’t you. They wrote articles for those with more experience with Ethereum, GitCoin and bounties.
Rahul: High gas prices affect all dapps and not just Gitcoin by Rahul Bishnoi
Shubham: What’s up with Gas: Exploring the roller coaster ride of Ethereum “Juice” By Shubham Gupta
Is Gas another cryptocurrency? No, it’s a decoupled part of Ether (ETH). That means that the price of Gas and Ether move independently. That’s good for everyone because as the value of ETH increases the cost of processing smart contracts doesn’t have to increase. Therefore, bounties with small rewards will always have a place in the market.
How do you determine how much Gas you need to process a contract (transaction)? The good news is that the system will recommend a price to get your contract processed in reasonable amount of time and a fair amount for the work involved. You have the option to increase the Gas offered. This encourages miners to process your contract before others because the miner will get paid more. Though offering too much Gas will discourage miners from taking your contract. This is because of the Block Gas Limit (BGL). That link goes into detail about that. You have the option to decrease the Gas offered too. Less Gas offered means it costs you less, but that could mean a longer wait time to get your contract processed.
What can cause the price of Gas to fluctuate? It’s supply and demand of miners processing contracts in relation to contracts available to process. If there are a lot of contracts and a lot of miners the price should be good for everyone. The price of Gas will increase when there are a lot of contracts and few miners to process the contracts. This may encourage bounty hunters like yourself to offer more Gas to get your contract processed faster. In an ideal world this is the market determining price.
The market should create a tolerable Gas price. A price that a miner would be willing and able to work for and a price you, the bounty hunter, is willing and able to pay out of your bounty.
Sidebar: A better definition is here if you desire more info. I recommend you make it there eventually. You may monitor the Gas price here. I recommend visiting that page before setting the price for the work your going to do or submitting work to be done.
So what caused the spike in Gas prices nine days ago and seventeen days ago, (time from the publishing of this article)?
What’s to prevent it from happening again?
Can I predict when it’ll happen?
Looking at the graph won’t give you the answer. To find out why you’ll have to do some digging. Thanks to the good folks at Team JUST Discord and GitCoin most of that work was done for you.
Possible causes:
High volume of work to be done and low supply of miners to do the work. The high volume of work may have been a result of a bot built by bad actor(s). Individuals gaming the system to inflate the market.
Please see these links to learn more about the spikes:
Possible Bad Actor(s) (Manipulation)
More About Possible Bad Actor(s) (Manipulation)
What can you do when prices spike? I’d be patient and wait for the prices to fall. The last two spikes lasted a little more than a day each. Hopefully you won’t put yourself in a position to need the bounty immediately. In that case, you’ve screwed yourself and there’s not much to do but pay. You’d have to charge that to the game, lesson learned.
Is it illegal to do that? From what I’ve read it isn’t illegal. The bad actor(s) are immorally playing by the rules. Technically, they aren’t cheating. Think of them as the Golden State Warriors. It’s NOT illegal, but you wish they wouldn’t do it. Best thing to do is take your bounty. Go home. Return when prices are not inflated.
I hope this article offered you some value. I strongly recommend checkout the other articles and doing your own research.
To learn more checkout Ethereum Reddit and the helpful links below.
Helpful Links:
