Gwei
Gwei is a small unit of ether (ETH), the coin of Ethereum. It’s mainly used to display gas prices, or transaction fees.
What is Gwei?
Ether can be divided into very small amounts. One Gwei is 0.000000001 ETH, or one billionth of an ether.
Ethereum is a blockchain: a shared digital ledger where transactions are processed. Actions on this network require computing power. You pay gas for that, a fee for processing the action.
The gas price is usually shown in Gwei. That’s easier to read than an amount of ETH with many zeros after the decimal point. Sending tokens or running smart contracts can also require gas.
An example of Gwei
Suppose you want to perform an action on Ethereum using a crypto wallet. You might see a gas price of 5 Gwei.
That means the price for the computing power required is shown in Gwei. Without Gwei, the same price would be written as 0.000000005 ETH. Gwei makes these small amounts easier to read.
Why is Gwei important in crypto?
Gwei often comes up in news about Ethereum, network congestion, and transaction fees. A higher gas price can mean that many people want to perform actions at the same time. This can make transactions more expensive.
If you use Ethereum, Gwei can help you understand why a transaction costs more or less at a particular time. A high gas price in Gwei mainly tells you about costs and possible network congestion. It doesn’t automatically predict what will happen to the price of ETH.
Gwei is also relevant in news about Layer 2 networks. These networks process many transactions together, which can make the cost per action lower than on Ethereum itself.
