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Gas In Crypto Is a Unit of Payment for Transactions In Blockchain

September 27, 2021
min. read

📢Gas in crypto is a unit of payment for transactions in blockchain:

💜1 Gwei = 1000000000 Wei

💙1 Ether = 1000000000000000000 Wei

On the one hand, the gas token price is determined by the initiator of the transaction — a customer. The customer sets the maximum limit one is ready to pay. In turn, the decentralized application states the cost of gas when a transaction is being proceeded. The higher the custom transaction price, the higher the priority of this transaction and the faster it will proceed. Thus, submitting transactions for low gas takes much longer.

🟣If the user’s maximum gas limit is lower than the displayed transaction cost, the transaction will fail. This is made to help the user control the transaction costs and to protect a wallet from fraudsters.

⚖Gas prices are weighted, and the application determines the minimum and maximum allowed gas fee depending on the complexity and importance of the transaction.

Blocks in the network also have gas limits, which means they can conduct a limited number of transactions per unit of time.

🔵This is the so-called blockchain bandwidth. Blockchains have different bandwidths and high transaction speed, which is one of the important competitive advantages.

The crypto gas price can vary from time to time depending on the demand in the network. For example, if many people interact with the blockchain at the moment, then amidst the limited amount of computing resources on the network, the gas price may increase. Or vice versa, when the network is underutilized, the market gas price drops.

🧿After the transaction is completed, all unused gas returns to the customer’s account. But if one sets too low a value for the gas token price limit, then the transaction is considered invalid and will be rejected due to the “Out of Gas” error, and the gas spent on calculations will not return to the customer. This has to be borne in mind that the sender always pays the miners for the calculations, regardless of whether the transaction proceeds or not.

🔷Gas Price Oracle shows the actual data on the base fee and the time required to conduct a transaction on the Ethereum network.

In Ethereum, not only is gas used to pay for ordinary transactions, but it is to pay for the launch of dApps on the blockchain.

💎The currency for gas payment depends on the blockchain.

The HECO blockchain, the Minto platform is running on, charges gas fees in HT tokens. So to make a transaction on this blockchain, you should have currency to pay for the asset you want to buy and HT tokens to pay for the transaction in your wallet.

🌍HT tokens can be bought on the official Huobi Global and the Gate platforms. These platforms show the minimum withdrawal size and the token’s price.

The advantage of the HECO blockchain compared to Ethereum is the low transaction fee, which makes Ethereum not cost-effective for small transactions.

🌌DeFi growing popularity affected Ethereum gas price, attracted many new users, and filled the system`s capacity. Obviously, the gas price rose. The network developers offer users ways to control the gas price. They suggest tip miners in order to indicate the level of the transaction priority.

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