Gwei
A denomination of Ethereum's native currency ETH, equal to 0.000000001 ETH (one billionth, or 10⁻⁹). Gwei is the standard unit for expressing gas prices on Ethereum. The name comes from 'giga-wei,' where wei is the smallest possible unit of ETH (10⁻¹⁸).
“If gas costs 30 gwei per unit and a transfer requires 21,000 gas, the fee is 21,000 × 30 gwei = 630,000 gwei = 0.00063 ETH.”
Gas
A unit measuring the computational effort required to execute operations on the Ethereum network. Users pay gas fees in ETH to compensate validators for processing transactions. Since EIP-1559, gas fees consist of a base fee (burned) and an optional priority fee (tip) to incentivize faster inclusion.
Ethereum (ETH)
The second-largest cryptocurrency and the most widely used smart contract platform, created by Vitalik Buterin and launched in 2015. Ethereum introduced programmable blockchain functionality, enabling the creation of tokens, DeFi protocols, NFTs, and dApps. In September 2022, Ethereum transitioned from Proof of Work to Proof of Stake ('The Merge'), reducing energy consumption by over 99%.
Transaction Fee
A payment made to network validators or miners for processing and confirming a transaction on the blockchain. Fees incentivize block producers and prevent network spam. Fee structures vary by blockchain — Bitcoin uses a fee market based on transaction size in bytes, while Ethereum uses gas-based pricing. During congestion, fees increase as users bid for limited block space.
Gas Limit
The maximum amount of gas units a user is willing to spend on a single transaction on Ethereum. If a transaction requires more gas than the limit allows, it fails and reverts, but the gas spent up to that point is still consumed. Setting the gas limit too low causes failed transactions; setting it appropriately prevents runaway costs from buggy contracts.