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Gas Terminologies in Ethereum and Their Meaning

Gas Terminologies in Ethereum and Their Meaning

Gas

This is a unit measurement of how much computation is done to verify or process a transaction in the Ethereum blockchain

Gas Price

This refers to how much a user is willing to per gas to get a work done. The unit for this is Gwei, a denomination for ether (ETH).

$$1 \: Gwei = 0.000000001 \: ETH$$

Transaction Cost

\(Transaction \;Cost = Gas \; Used \times Gas \; Price\)

For example, if a miner uses 5 units of gas to mine a block, and a user is willing to pay 2,000 Gwei per unit, the transaction cost is 10,000 Gwei.

Gas Limit

This is the maximum amount of gas a user is willing to pay for a given transaction. A user may decide to set a very low gas limit. However, the downside of this is that one may run out of gas before the transaction completes. When this happens, the miner stops processing the transaction, reverts the smart contract to its original state, and takes the fee anyway.

Gas Block Limit

This refers to the maximum amount of gas allowed in a block. Currently, Ethereum blocks can't hold more than 6.7 million Gwei.