What Is Ethereum Gas?

What Is Gas on Ethereum?

Gas is the unit that measures the computational effort required to execute operations on the Ethereum network. Think of it like gasoline for a car — you need it to run, and the amount you need depends on how far you're going.

Every operation on Ethereum — sending ETH, transferring tokens, executing smart contracts, minting NFTs — requires a specific amount of gas. Simple ETH transfers always cost exactly 21,000 gas units. More complex operations involving smart contracts can require millions of gas units. Gas fees are always paid in Ether (ETH), regardless of which token you're transferring.

What Is Gwei?

Gas prices are quoted in Gwei, a denomination of ETH. One Gwei equals 0.000000001 ETH (one billionth of an ETH). The name comes from giga-wei, where wei is the smallest indivisible unit of Ether, named after Wei Dai, creator of b-money. When you see 5 Gwei as a gas price, your total fee for a standard transfer is 21,000 x 5 Gwei = 105,000 Gwei = 0.000105 ETH.

How EIP-1559 Changed Gas Fees

Before EIP-1559 (August 2021), gas pricing was a simple first-price auction — you bid whatever you thought miners would accept. This caused unpredictable fees and frequent overpayment. EIP-1559 introduced a base fee that adjusts algorithmically block by block and gets burned. Users add an optional priority fee (tip). This made fees more predictable and reduced ETH supply over time.

• 1 ETH = 1,000,000,000 Gwei (one billion Gwei)
• 1 Gwei = 0.000000001 ETH
• Standard ETH transfer: 21,000 gas units x current Gwei price
• Gas price in Gwei x ETH price in USD = your fee in dollars