On the Ethereum network, “gas” refers to the unit that is used to measure the amount of computational effort required to execute a transaction or smart contract.
In other words, gas is used to allocate and measure the computing resources that are needed to run a particular operation on the Ethereum network.
Gas is an important concept in the Ethereum network because it helps to prevent spam and ensure that the network remains secure and functional.
Each operation on the Ethereum network requires a certain amount of gas to be executed, and the cost of gas is paid in Ether (ETH), the network’s native cryptocurrency.
This means that when a user wants to execute a transaction or smart contract on the Ethereum network, they must include a gas limit and gas price in their transaction in order to have it processed by the network.
Gas price vs Gas Limit
In Ethereum, the gas limit and gas price are two important parameters that are included in every transaction. These parameters are used to determine the cost of executing a transaction or smart contract on the Ethereum network.
The gas limit specifies the maximum amount of gas that the user is willing to pay for the transaction. Gas is the internal pricing for running a transaction or contract on the Ethereum blockchain, and is measured in units of GWEI.
The gas limit is therefore the maximum amount of GWEI that the user is willing to pay to have their transaction processed by the network.
The gas price, on the other hand, specifies the amount that the user is willing to pay per unit of gas. This is the amount that the user will be charged for each unit of gas that is used by their transaction. The gas price is usually denoted in GWEI per unit of gas.
Together, the gas limit and gas price determine the maximum amount that the user is willing to pay for their transaction to be processed by the Ethereum network.
When the transaction is processed, the actual gas fees that the user pays will be calculated based on the gas limit and gas price that they specified, as well as the actual amount of gas used by the transaction.
In summary, the gas limit specifies the maximum amount of gas that the user is willing to pay for their transaction, while the gas price specifies the amount that they are willing to pay per unit of gas. These parameters are used together to determine the cost of executing a transaction on the Ethereum network.
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