✍️ 1 October, 2022 – 7:10 👤 Editor: Jakub Motyka
- The cost of gas is a widely used term when operating on the Ethereum (EHT) network.
- It refers to the price or expense needed to complete an operation.
- What exactly is gas? What is it for? Read on to find out more.
If you are just starting out, or have been in the world of cryptocurrencies for some time, you have surely heard of gas at some point. This is a very important issue when it comes to transacting in the Ethereum network.
Many NFTs have doubled and sometimes tripled their purchase price as congestion has increased the value of gas. But why is all this? What is gas in the crypto world?
What Is Gas In Crypto?
The gas is the operational cost of a transaction within the Ethereum (ETH) network. This can be from a normal exchange, to the execution of a smart contract. The gas is the unit of measure of work for the interactions with the network.
Gas is not a currency, it is only a quantitative representation of the computational expense within the Ethereum network. It cannot be stored in a wallet or exchanged, since it is a concept that only exists within the EVM to count the amount of work. This has a fixed value called Gwai, which is equivalent to a amount of ether. Each protocol has a Gwai determined per transaction, so it will not change even if the ETH goes up or down in price.
The easiest way to understand gas is to think of it as the gasoline in a car. When making a trip, that is, an interaction with the Ethereum network, the car needs gasoline, in this case gas, to be able to move. This will have a fixed value, but its price will be subject to the supply and demand of Ether at a given time. In other words, operating costs are not the same on a congested street as on a clear one.
What Is Gas Used For In The Ethereum Network?
As we said before, the gas is used in all transactions that interact with the Ethereum network. The costs allow the network to be kept active, ensure that there are no unusable transactions or degenerative attacks, and they serve as a reward for miners.
However, since Ethereum’s last update, The Merge, validators play the role of miners to get their rewards.
Also check this:
- What Is A Crypto Mixer?
- Ethereum (ETH) Whales Flee After The Merge
- Cardano (ADA) Upgrades to Plutus V2 Cost Model
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