Exploring the Crypto World with Chatex: How Does Gas Work in ETH and What Cryptocurrencies Have Younger Brothers?
The transaction speed in the blockchain depends on the network load. If you need to make a payment faster, you can pay a higher fee. In the Ethereum blockchain, there is Gas — a special internal currency for this.
Gas Limit and Gas Price
At first glance, ETH is a cryptocurrency, just like Bitcoin. In fact, this is not so. The Ethereum blockchain has a fundamental difference from the Bitcoin blockchain: smart contracts can be executed in it. Transferring value from one address to another is just one operation out of an infinite number of possible operations controlled by smart contracts. And since these operations can have different complexity, then the fee can be different. That is why such a payment method as Gas is implemented. By the way, Gas serves as a certain defense against attacks on the blockchain. If smart contracts were executed without fees, it would be possible to send a task, or a thousand tasks, with a built-in infinite loop, and the network would be overloaded. For each operation there is a certain fee limit, below which it will not be executed. For regular payments or transfers, the Gas Limit is 21,000.
In addition to smart contracts of different functions, Gas is also affected by the usage of the network, which is changing all the time. To take this into account in the fee, there is a Gas Price parameter. The total commission fee is obtained as the product of these two values, Gas Price and Gas Limit. You can find out the current Gas Price value on one of dozens of online meters for the Ethereum network, it is not difficult at all. Wei and Gwei
Values in the thousands of units can also scare off users, especially beginners. You have to understand that this is not a lot of money. When Vitalik Buterin came up with his Ethereum, he was only 19 years old. So he used some exotic names and values. Gas is measured in Gwei, which is one billionth ETH. In turn, Gwei is the giga-wei, that is, a billion wei, the minimum share of Ethereum. Wei is named after Wei Dai, a computer engineer known for his work in cryptography and developing the open source Crypto ++ cryptographic library that is widely used in cryptocurrency development. So, even an impressive Gas, say at 84,000 Gwei, is only 0.000084 ETH.
A user can designate Gas by himself/herself when sending payment. But if he/she uses small Gas, then the transaction will not be executed. The transaction amount will be returned to the wallet, but Gas will not. After all, the fee is paid to miners who honestly completed their part of the work and received payment for it. By the way, if Gas is surplus, then the unspent part of it will be returned to the wallet. Most popular wallets automatically assign the correct Gas, including the BitGo wallet I use. So you do not have to worry about what is Gas, Gas Limit and Gas Price. But it is always better to know all the details when it comes to your money.
NEO, Maker and others
The decision to separate the cryptocurrency and the commission fee seemed to be successful to many developers. Therefore, there are other projects with two coins. One of the most famous is NEO that is among the thirty in terms of capitalization. It is sometimes referred to as the Chinese version of Ethereum. Its creators have not much thought and named their second coin Gas too. Just like Ethereum Gas, this Gas is used to pay a fee.
The creators of the MakerDAO project were more original. Here Maker (MKR) is used to manage the DAI stablecoin that is pegged to the US dollar. The peg is soft, that is, the DAI price is backed not by dollars in accounts but by other digital assets that are used as collateral. As for stablecoins, more and more of them appear every day, but the most popular is Tether (USDT) that is, by the way, also available in my wallet.
As you can see, two coins in one cryptocurrency are not uncommon, and sometimes very useful. For example, when you need to make an urgent transaction on the ETH network, you just need to raise Gas.
Do not forget that I have the ability to speed up transactions even in the Bitcoin network that does not have an internal currency for the commission fee. But I have the function of the Fast withdrawal with the increased fee. My users can afford it because fees charged by Chatex are among the lowest in the market.