Gas

Ethereum defines gas as “the unit that measures the amount of computational effort required to execute specific operations on the network.” Every operation, from a simple transfer to a complex smart contract call, has a gas cost. A basic transfer of ether uses 21,000 gas; more complex actions use more. You pay for the gas your transaction consumes, which is how the network is compensated and protected from spam.

Why it matters

Under the EIP-1559 mechanism, the fee has two parts. The base fee is set by the protocol, must be paid for the transaction to be valid, and is burned; it adjusts each block with demand. The priority fee, or tip, is optional and incentivises validators to include your transaction sooner. The total is calculated as: gas used multiplied by the sum of base fee and priority fee, with the per-unit price expressed in gwei.

Common misunderstanding

A common confusion is mixing up the amount of gas (the work) with the gas price (what you pay per unit). A transaction’s gas amount is largely fixed by what it does; the price you pay per unit varies with network demand. Another is assuming a failed transaction is free. If a transaction runs out of gas or reverts, the work performed is still paid for, because validators expended effort. Setting a sensible gas limit and understanding the fee components helps avoid surprises. It also makes it easier to judge whether a wallet’s suggested fee is reasonable rather than accepting it blindly.

Related terms

• Gwei
• Transaction
• Nonce
• Mempool