How does Gas in Ethereum work? Gas price, Gas limit, Gwei and how to use and calculate etc

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Adriaan Admin

Staff member
Jan 30, 2018
For beginners the concept of Gas in Ethereum is a bit hard to grasp beyond that you have to pay for it if you want to do transactions on the ethereum network, either to just simply transfer Ether, transfer Ethereum's ERC20 tokens, interact with smart contracts or participate in ICO's. In the last example the concept of Gas Wars is also something to know about (Gas wars means in high profile ICO's where there are more demand than tokens available, some people pay ridiculous amounts of Gas to outcompete other contributors and have their ICO contribution transaction included in a block sooner than others; it is not unusual that big whales pay $10,000 in Gas to have their transaction included first before the rest). But how does the concept of Gas works and how do you calculate Wei/Gwei, gas price and gas limit and why do they matter? We have quite an indepth but still beginner friendly article on our website explaining the whole concept of Gas on Ethereum that will hopefully make you understand this better, because it is a very essential mechanism that defines the Ethereum Virtual Machine and Blockchain. If you still have any more questions after reading the article, feel free to ask for more clarification in this thread.