THE CONCEPT OF GAS: HOW CAN YOU LEVERAGE ON IT?
Making profits or preventing losses in investing or trading cryptos depend on a lot of micro and macro factors. In as much as some of these factors, such as fundamental and technical analyses, get a LOT more attention than the others; there are some that are really deserving of some recognition. They might look minute at first glance, but could prove to be very consequential when properly leveraged or otherwise. One of these micro factors is gas. This term is one that does appear quite often, especially if you are one that frequents that Ethereum blockchain. So what is it? How does it work? And how can you benefit from it?
Gas is you pay on the blockchain to carry out a transaction or perform a contract on it. It serves as compensation to miners and block producers on the blockchain for the effort exerted on validating transactions, as well an incentive for them to continue doing so. It basically works on the simple basis of demand and supply. For a transaction on a blockchain to be successful, it has to be included in the block by miners. Every transaction has to be validated by miners before going through, and this would cause an overload on a very busy blockchain. In this case, miners can choose to exercise their discretion as to which transaction to validate. Very often, they opt transactions that pay the highest gas. That would mean that your transactions might take a very long time to get completed if you do not pay a high gas fee. It is not an alien occurrence on the Bitcoin network, and it is even more prominent on Ethere
On the Ethereum network, there is a feature known as a gas limit; a perimeter you set indicating the highest possible quantity of gwei (the Ethereum unit of gas) you are willing to spend as gas fees for a transaction. That means the gas charge that will eventually see through your transaction will not exceed the limit, but miners that your limit do not meet their requirement can choose to ignore your transaction. Due to gas requirements and gas limits working with the forces of demand and supply, gas fees are ever-changing. Plus, the utility of the Ethereum network and the resultant spending of gas increases the Ethereum coin’s value. And since gwei is a unit of Ethereum itself (1 ETH = 1,000,000,000 gwei), it is pretty clear why Ethereum’s gas fees are notoriously expensive.
How then can you leverage what you know about gas? For one, you could become a miner yourself so you could be on the very frontline yourself. However, mining can be really hard and technical, except you mine indirectly by investing in a mining pool. In the event that you choose to transact in other ways on Ethereum, then you might want to follow some tips to cut costs. According to data analysis done by Paxful, gas fees are lowest on Saturdays and Sundays, and highest on Tuesdays and Thursdays. The cheapest time of the day to transact is between 00:00 and 04:00 EST, which is about 05:00 to 09:00 WAT. By this time, the people in the US are asleep, Europe is just about to start their day, while Asia is finishing up their workday. This means a lot less traffic, in contrast with the period between 08:00 and 13:00 EST (about 13:00 to 18:00 WAT), when the network is busiest. Timing your transactions to coincide with the less congested times could help you save a fortune on gas fees. You’re welcome!
