As a member of the crypto community, you must have heard about Gas Limit and Gas Price, right? It is considered one of the most important factors for the functioning of the entire Ethereum network. This article will help you answer the question Gas Limit, What is Gwei? Gas Price in Ethereum.
Learn what gas is?
Before we get into the concept of Gas Limit, what is Gas Price (Gwei), let’s briefly learn about Gas to get a more comprehensive picture. So, what is Gas? Gas is known as a unit of measurement? So, what does it measure? Gas measures the computational work of a transaction or smart contract on the Ethereum network.
In simple terms, this system is similar to how KW becomes the unit for measuring the amount of electricity consumed. If the amount of electricity you use is not directly calculated in dollars, it is expressed in kWH or Kilowatt-hours and then converted into the amount to be paid. The same goes for the Ethereum network, which uses Gas to convert everything into coins.
And the amount of gas for each transaction is not the same, but depends on many other factors. An example for you to easily imagine is the following: A simple transaction, specifically sending ETH from one place to another, costs only about 21,000 Gas. But if it is a transaction to send ICO tokens from MyEtherWallet wallet, a higher calculation is required, so the fee will also be higher.
Learn more about what is gas limit?
If you already understand the concept of Gas, it will be much easier to imagine the concept of Gas Limit. To learn more about this type of word, go directly to the next section.
So what is Gas Limit?
Gas limit or gas cap means the maximum amount of gas you are willing to spend on a specific transaction you make.
Quanto melhor o Limite de gás, também significa que mais trabalho de computação terá que ser feito para executar o contrato inteligente. De acordo com a norma, a execução de uma transferência de ETH tem um Limite de Gás de 21.000 Gás.
The complexity of the orders you want to execute will be proportional to the amount of gas you pay. In other words, you will have to spend more money on more complex computational tasks, which is very easy to see when participating in ICOs. These projects will require investors to deposit their ETH into smart contracts or withdraw money from this ICO, both of which will incur much higher transaction fees than the standard gas limit of 21,000 gas.
The explanation for this is not very difficult to understand, when ICO smart contracts have quite complicated command lines compared to normal ones, as well as require much more computational work, while the order to transfer ETH from one wallet to another is not very complicated.
Gas limit is the maximum amount of gas ready to spend
Aiming to protect users from running out of money due to code errors or bugs in smart contracts, Gas Limit is operated as a safety mechanism.
What happens when the Gas Limit is set too low?
When the Gas Limit is set too low, it will affect miners' transaction confirmation. Specifically, at first, the transaction will still be executed by the miner as usual. But when the gas runs out, the miner will stop confirming your transaction.
And of course, the blockchain system will not record your transaction as successful. Of course, your ETH is still in your wallet because this transaction failed.
Also, your Gas is used for this transaction, even if it fails, it will also be kept by the miner or only a part may be returned.
What happens when the Gas Limit is set too high?
If given 2 options to the miners: Transaction A has a gas limit of 42,000 gas, transaction B&C has a gas limit of 21,000. So which transaction will the miners choose to perform? The answer could be the first or the second, but the latter makes more economic sense.
Because when choosing number 1, the miners after mining will return the unused gas to you, and in the second choice, they seem to consume the maximum and have nothing left to pay. The B and C transaction is made to add more value than A, isn't it?
This answers the question: why you shouldn't set the Gas Limit so high. You should only set it a little higher than the default, and for necessary trades do so to be safe.
What is the price of gas?
If you are really clear about Gas Limit then here I will briefly introduce you about the second term which is Gas Price.
Gas Price Overview
The price of gas is translated as gas price, it is related to the amount of ether you are willing to pay per unit of gas or Gwei – full is the unit of measurement for each unit of gas. In simple terms, the price of Gas is similar to the amount to be paid per liter of gasoline.
Familiarize yourself with concepts related to Gas Price
Median Wait(s): This is the average wait time for a single transaction and is measured in seconds.
Average wait (blocks): This is the average waiting time for a transaction in blocks.
Standard (default) cost for transfer: This is the average fee you will pay to transfer ETH for a standard priority transaction and it is in USD and the wait time is less than 5 minutes.
Gas Price Std (Web): This is the average fee you should pay to transfer ETH for a standard transaction based on the Gwei value.
Low cost secure transfer: This is the average fee you pay to transfer ETH for a low priority transaction, calculated in USD, and the wait time is less than 30 minutes.
Gas Price Safe Low (Gwei): This is the average fee you pay to transfer ETH for a low priority transaction, calculated in Gwei value.
How to calculate transaction fees?
The final formula for calculating the transaction fee Ethereum is: Transaction fee = Gas used by Txn * Gas price
Transaction fee calculated by Gas Used per Txn * Gas Price
Não é difícil ver a quantidade de Limite de gás excedendo o nível de gás real. Especialmente em uma época em que os ICOs se tornaram uma mania. Porque para dar uma chance melhor de confirmação da transação, a casa vai aumentar o nível do preço do gás. Porque eles querem acompanhar a tendência de correr para participar das OIC.
How to convert gas to ether?
The conversion price will not be fixed, but will constantly change. The person making the transaction can choose an arbitrary gas price level they want.
Just as miners can choose which transactions they want to verify, of course this choice will depend on the Gas Price, the higher the Gas Price, the more attractive it will be for them.
The average gas price is usually around 20 Gwei (or about 0.00000002 ETH). When there are many transactions competing with each other, this number can increase, at which point network traffic is high.
What happens when gas is refunded?
The amount of gas is non-refundable. In it, there are 2 commands that guarantee that the user will receive the Gas back: This is SUICIDE (this is the command that will kill the smart contract, and the Gas that the user will receive back is 24,000 Gas.) And SSTORE (It has the function of clearing the memory, from which users can recover 15,000 Gas.
It is known that Gas is the temple's remuneration, it represents the efforts they calculated for the work. Therefore, of course, it is not arbitrarily returned to the user. For this to happen, a certain condition must be added as follows: Gas returned cannot exceed half of the Gas consumed in the calculation of transactions.
Conclusion
Surely, through the above article, you have understood the concept of Gas, as well as understood the issues surrounding the two terms Gas Limit, what is Gwei, and some information about the Gas Price in Ethereum. Hopefully, after this article, you will have a better understanding of the issues raised at the beginning of the article.