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The Fuel of the Blockchain

CT_School: Why do You Need Gas on Blockchain?

One of the core things in a blockchain and the Ethereum network is gas. But how is gas related to the digital world? Let’s find out.

What is gas?

Gas is the unit that measures the amount of computational work needed for the execution of particular transactions on the network. Every time you want to withdraw any amount from your wallet, exchange currency, or pay for something, you stumble upon gas. All these operations on blockchain require computational work that is performed by miners. Thus, the gas fee becomes their reward for realizing the transaction.

How does it work?

1 Blocks

To understand the idea behind gas, we first need to understand what are blocks.

A block consists of transaction data as well as records of the previous block. Due to them, blocks link them together, creating a chain — hence the name blockchain.

2 Gas function

All transactions on the Ethereum blockchain require gas to be carried out. During the execution, gas is depleted according to specific rules.

If the gas is fully used up at any point, the execution ends. And if there is some gas left after the transaction execution, it is given back to its originator.

What is the price of gas?

There are two things we need to consider:

Gas price — the amount you are willing to pay for one unit of gas. It is priced in Gwei.

Gas limit — the amount you are willing to pay for the whole transaction.

Some services provide you with a fixed gas price and limit, but in some cases, you can adjust them manually, according to their need. But in general, if we refer to Ethereum, a standard transaction would be made with, at least, a 21,000 gas limit.

Still, faster operations would likely charge higher fees. While the one with a very low gas limit and gas price would likely take too long to be confirmed, or not be confirmed at all (your transaction would not be executed).

Now you know what gas is and what you have to pay for during the initiation of certain transactions.

Share this article with your friends so that they can also know all the necessary information about gas. You can ask all your questions on our Twitter!

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Published: 09.06.2022

#blockchain #theory #gas #CT_School

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