Crypto Dictionary
Gwei
Definition
A denomination of Ether, used to measure gas prices.
Deep Dive
Gwei is a specific denomination of Ether (ETH), the native cryptocurrency of the Ethereum blockchain, primarily used to express "gas prices." Gas is the fee paid to miners/validators for processing transactions and executing smart contracts on the Ethereum network. Since the cost of gas can be very small, using the Gwei unit makes these values more manageable and understandable than trying to express them as tiny fractions of a whole Ether. One Gwei is equal to 1,000,000,000 (one billion) Wei, and 1 Ether is equal to 1,000,000,000 Gwei (10^9 Wei).
Examples & Use Cases
- 1When a user sends an ETH transaction, they might set a "gas limit" and a "gas price" of, say, 30 Gwei, meaning they are willing to pay 30 billion Wei per unit of gas consumed.
- 2A dApp might display the current network's average gas price as "50 Gwei" to inform users about the current cost of transactions.
- 3Developers optimizing smart contracts aim to reduce their "gas consumption," effectively lowering the number of Gwei units required for execution.
Related Terms
Ether (ETH)GasWei