What is Gwei?

Gwei is a cryptocurrency used on the Ethereum network.

1 Ether = 1,000,000,000 Gwei (109)

Similar to the various small value coins circulating for real-world fiat currencies such as nickel, coin, and penny, several denominations have become popular in the crypto world to refer to different shards of a particular token.

With the price of ETH increasing in 2017, the transaction size has become smaller. Say, if 1 ETH = 800 USD, then one only needs to spend part of ether (0.0025 ETH) for the equivalent of 2 USD. Other sharding costs, like mining fees, can be even smaller in value, making it difficult to quote a long shard value (like 0.00034243 ETH).

New digital currency denominations are gaining popularity that accurately represent smaller transactions that appear to be a very long chunk in ether terms, but have a high value when converted to US dollars or coins other fiat currencies.

Gwei is also known as shannon, nanoether, or simply nano, to denote the ninth power in the ether fraction.

You can use Myetherwallet’s tool to calculate GWEI <-> WEI <-> USD here, which can be useful when you want to know your transaction fees in ETH, instead of GWEI.

What is Gas?

Gas is the internal cost of executing a transaction or contract in Ethereum.

The concept of using a separate unit (gas price) instead of the network’s default token, ETH. It separates units of Ether (ETH) and market value. As a result, a “miner” can decide to increase or decrease gas usage according to his or her needs​.

For example, imagine that miners claim 1/10,000 of ether for a single mining session. If they then wanted to increase the mining fee by 25%, it would amount to 1/8000 ether. This increase in the price of mining will start to affect the price of ether in fiat currencies like US dollars, VND which may not be the ideal way.

Instead, if mining is quoted in a separate unit, like gas price, and this value would be 1/10,000 ether, the increase (or decrease) could be resolved by gas price change. For the same 25% change, miners will get the same benefit if gas is changed to a value of 1/8000. That keeps the ether market price independent of the units required to use network computing.​

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