Ethereum miners accept payment for processing and placing transactions into the new Gas . If in Bitcoin the commission process is quite clear (send funds, pay a commission, wait for approval, receive), then in Ethereum it is structured somewhat differently.
Gas is a unit of calculation that is used to calculate and pay fees for a specific action or transaction.
The basic principle remains the same - paid more - the transaction will go faster. But ether was created not as a payment system, but as a tool for creating decentralized applications (DApps), in which any operation is controlled through smart contracts - a special algorithm that is a chain of conditions for performing a certain action. Therefore, in order to transfer funds from one address to another, a smart contract is created in which, in addition to the amount of the commission (Gas), we need to specify other parameters.
What is Gas (Ethereum)?
You might think about gassing up your car or even what you've eaten before when you hear the term "gas." However, this term has a special context in the world of cryptography. Gas in cryptography refers to the computational effort required to perform operations.
You must pay a gas fee to make a transaction or execute a smart contract on the Ethereum network. No matter what wallet you use, you will always need to pay for gas when making transactions.
Want to send your mom some ETH? This transaction requires gas. Want to lend your money through Compound? This deal also requires gas. What about buying NFTs? You guessed it - gas. Gas is like a toll. If you want to use the highway, you must pay a toll. The more a car is forced on the road, the more toll the driver must pay. Tolls for 18-wheelers are much higher than for motorcycle drivers.
Likewise, the more complex the transaction on Ethereum, the higher the gas fee.
What is Gas Limit?
Gas Limit is a coefficient that is used to calculate the final transaction cost.
It is multiplied by the Gas Price, and the result in ETH will be the total commission for the transfer. So you decided to send Ethereum or tokens (to participate in an ICO or to another address) using the MyEtherWallet or MetaMask cryptocurrency wallet, when suddenly an error appeared:
Insufficient funds. Account you try to send transaction from does not have enough funds. Required xxx and got: xx. There is not enough gas to complete the transaction...
This means that there is not enough ETH on the wallet balance, which is needed to pay the network commission (calculated in Gas Limit and Price units).
Attention: The Gas that is needed for transfers on the Ethereum network is not at all the same that is listed on cryptocurrency exchanges and served by Neo. Don't confuse them (you can get the second one for free).
Each transaction (transfer between wallets, payment of tokens through Pre-Sale, crediting of purchased tokens after the ICO, deposit of ether to the exchange, any return of ETH and tokens, as well as all technical operations with smart contracts) require Gas for implementation.
Fresh example:
- If you created a new seed phrase for your wallet, but before that you withdrew all the ether from your balance (and left the tokens), then you will not be able to transfer funds.
- You will not be able to pay the network commission - you will have to top up your wallet.
- How much ETH do you need for these transactions? The calculator at the end of the article will help you calculate the exact amount.
Here's how the transaction processing process works in Ethereum:
Gas is deducted from your ETH balance, so if you don't have Ether in your MEW wallet, the transfer will not be processed.
Remember that if the operation fails, or if there is an error in the transfer (for example, when participating in the ICO, you indicated a lower Gas limit than required in the network, so your transfer was returned), the Gas spent will not be compensated.
Therefore, you should carefully study the terms of the ICO, where the required Gas Limit (most often 200,000) must be clearly indicated. And do not send funds back to back, to the last penny - try to keep some supply of ETH in your wallet.
What is a gas limit?
Gas fees are quoted in Gwei, which is only 0.0000001 ETH. You can think of Gwei as cents, since 1 cent is equal to $0.01. For each transaction you want to make, you must indicate how much fee you are willing to pay to complete the transaction.
The maximum amount of gas you are willing to pay for a particular transaction is called the gas limit. Additionally, you must also enter the gas price for each transaction. Gas limit x gas price = gas fee. You pay a gas fee when you submit a transaction.
Luckily for you, MetaMask calculates the approximate gas fee you should be charged based on how quickly you want your transaction to be confirmed.
Let's understand what Gas, Gas Limit and Gas Price are in the Ethereum network
In the Ethereum network, unlike Bitcoin, there is not only the cryptocurrency of the same name - ether, but also Gas and Gas Limit. They allow users not only to pay for transactions, but also to launch smart contracts and DApps, as well as store data on the blockchain.
Ethereum platform
The platform of the second cryptocurrency in the world by capitalization, Ethereum, was launched in July 2015 by Vitalik Buterin. The platform's goal is to provide developers with an open, distributed network to run their own decentralized applications (DApps) and smart contracts. While the Bitcoin network plays the role of a peer-to-peer payment system, Ethereum is designed to execute program code using a decentralized virtual machine (EVM).
Ether is an internal cryptocurrency mined by miners to keep the network running, and unlike other cryptocurrencies, its role is not limited to just payments. One Ether coin is divided into: Finney, Szabo, Gwei, Mwei, Kwei and Wei, where Wei is the smallest unit of Ether. The developers gave these names to the shares of ether in honor of famous personalities who made a significant contribution to the development of cryptocurrencies. One ETH is equal to a thousand Finney, a million Szabo, a billion Gwei and a quintillion Wei.
Number of Wei units in each lobe
Transactions in Ethereum
For any transaction or action on the Ethereum blockchain, a commission is charged, which the miner receives. The miners of the network confirm transactions and decide which of them will be included in the new block of the network. The transaction fee is calculated in gas and paid in ether . Which means that gas is the “fuel” of the Ethereum network, which is used to conduct transactions, execute smart contracts and launch DApps, as well as to pay for data storage.
Gas has two components - limit and price. Thus, the operation of the Ethereum network is ensured by:
Ether (ETH) is a cryptocurrency of the Ethereum network, the second largest in terms of capitalization on the crypto market.
Gas is a unit of calculation that indicates the amount of commission for a specific action or transaction.
Gas Limit is the maximum amount of gas that the user is willing to pay for performing this action or confirming a transaction (minimum - 21,000).
Gas Price is the amount of Gwei that the user is willing to spend on each unit of gas.
For each transaction, the sender sets a gas limit and price. To independently calculate the total cost of the Ether transaction fee, you need to multiply the gas limit by its price. For example, if the gas limit is 50,000 units and the gas price is 20 Gwei, then this means that the sender is willing to spend 0.001 ether to complete the transaction.
The higher the gas price that the sender is willing to pay, the more priority his transaction in the Ethereum network, since the miner's reward will be higher. This option is suitable for those who are participating in the token pre-sale of a popular ICO and want to increase the chances of their transaction being included in the next block. However, by setting a low gas price, the sender saves his own money, for example, when transferring funds from one wallet to another.
After completing the transaction, all unused gas is returned to the sender's account. But if he specified too low a value for the gas limit, then his transaction is considered invalid and will be rejected due to the “Out of Gas” error, and the gas spent on calculations will not be returned to the account. It is worth keeping in mind that the sender always pays the miners for the calculations, regardless of whether the transaction goes through or not. The process of processing a transaction from the MyEtherWallet wallet will look like this:
In order to calculate the amount of ether, gas limit and transaction time in ETH or USD, there is an online service ETH Gas Station. And the GasPriceOracle service, based on information about recent transactions, calculates the price of gas and the time required for miners to perform calculations. Today, for 1 Gwei it will take about 30 minutes to confirm a transaction, and for 40 Gwei it will take about 1-2 minutes.
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Where do your gas fees go?
You may ask, “Why will my transaction be confirmed if I charge a higher gas fee?” Great question!
When you send a transaction on Ethereum, you are competing with other people who also want to send a transaction. While you can send your mom some ether, someone in India can trade on Uniswap. Each person is trying to complete their transaction at the same time. But only a certain number of transactions can be included in an Ethereum block, and only new blocks are created every approximately 13 seconds. In fact, each block contains only 12.5 million units of gas. This means that everyone is competing with each other to include their transaction in the next block. When demand is high and supply is limited, since only a certain number of transactions can be included in a block, the price must increase.
But when you send transactions, where are they before the miners approve them? These transactions are sent to a memory pool, short for memory pool. The mempool is where all transactions that have been sent but not yet verified are located. In short, a mempool is a queue waiting for verification. Miners, who check transactions before execution to ensure they are not malicious, select transactions to be included in the next block from the mempool.
“So why do miners choose my transaction from the mempool before anyone else?” Because of course I'll pay them more!
Miners choose which transactions should be included in the next block based on how high the gas fee is set by users before sending the transaction. The higher the gas fee, the higher the likelihood that the miner will want to include your transaction in the next block. In this situation, there is competition because you are competing with everyone by charging gas fees for that period of time for block space.
Out of gas ethereum
Ethereum Stack Exchange is a question and answer site for users of Ethereum, the decentralized application platform and smart contract enabled blockchain.
It only takes a minute to sign up. Sign up to join this community. For example, interacting with smart contracts often leads to high costs since the. ETH wallets such as MetaMask provide a way to set the gas limit. If you run out of gas when exchanging Ethereum, it's similar to running out of gas when driving a car, except imagine that you reached your destination without being able to get out of the car. If you see the message out of gas, your exchange was successfully completed. Increase the gas cost of SLOAD ( 0x54) to 2100, and the *CALL opcode. though these technologies may take a long time to fully roll out.
Not enough gas for a transaction! How many gwei is it? by Y Faqir-Rhazoui · 2022 · Cited by 1 — However, most blockchain infrastructure (e$1. Ethereum) requires. We need to talk about the block gas limit. Here are some definitions of terms related to gas. The referenced eth APIs are part of the library. gas: unit of measurement for the computational work of running transactions or smart contracts in the Ethereum network; gasLimit: maximum amount of gas that can be spent on all transactions within a single block. This is not configurable.
Why do transactions take so long?
Since all users are competing with each other for block space, if you set your gas fee too low, miners will choose not to include your transaction in a block in the near future. So your transaction is taking so long because you haven't set your gas fee high enough for your transaction to be included in the block in the near future. You will have to wait for the gas fees that other users are willing to pay to decrease in order for your gas fees to be attractive to miners.
Disclaimer: This article is intended for general guidance and informational purposes only for those new to cryptocurrencies and DeFi. The contents of this article should not be construed as legal, business, investment or tax advice. You should consult your own advisors for all legal, business, investment and tax implications and advice. ConsenSys is not responsible for lost funds. Please use common sense and do your due diligence before interacting with smart contracts.
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Parameters for commission calculation
The first of them is Gas Limit or Gas Limit - the maximum amount of Gas that can be debited from you when conducting a transaction or performing any cycle of operations.
It is necessary to remember that the standard Gas limit for making one transfer of ETH to another address is 21,000 Gas!
Those. if you use your Ethereum wallet only to make payments, this parameter will always remain unchanged, because all transactions are processed by a standard smart contract for sending, the same for everyone.
But sometimes, to participate in an ICO, you need to increase this parameter so that the purchased tokens can be returned to your address. In this case, you should not experiment - you need to contact the contact persons indicated on the official website of the project and find out from them the recommended size of the Gas Limit parameter.
To understand what happens if we make a mistake when choosing a limit, let’s look at everything using an example:
To participate in the ICO, we want to send a certain amount of ETH to the project wallet address. For the transaction we have set the Gas Limit parameter to 100,000. Now there are two options:
- A limit of 50,000 was specified in the project’s smart contract. Therefore, our gas will be enough and the transaction will be successfully included in the blockchain.
- A limit of 125,000 was specified in the project’s smart contract. Our hundred thousand are not enough to cover this amount, which means they will simply be completely spent, but the transaction will not be carried out. In this case, an error will be displayed in our wallet:
“Insufficient funds. Account you try to send transaction from does not have enough funds. Required xxx and got: xx. There is not enough gas to complete the transaction...”
The sent funds will be returned back to our wallet minus the cost of the Gas spent - 100,000. A reasonable question arises: why did the developers do everything this way?
The Gas Limit is one of the error protection functions. As we have already said, Ethereum is a platform primarily aimed at developers. Quite often, applications need to run large loops of operations. It is precisely to ensure that the user does not lose a large amount as a result of an algorithm error and that Gas Limit exists.
