What is Gas Price & Gas Limit in MyEtherWallet?

First of all, what is Ethereum? Ethereum is a network, which is also known as blockchain and Ether also known as ETH is the fuel for that network. When we are sending tokens, or interacting with a contract, sending ETH or do anything else on the Ethereum network, we must pay for the computation. This payment is calculated in Gas and gas subsequently is paid in ETH.

Gas Transaction Fee

One thing that you should note is that you have to pay for the Computation, regardless of whether your transaction is successful or not. If the transaction fails, the miners have to validate and execute our transaction, that is, compute our transaction, and hence we have to pay for that computation just like we would have paid for the transaction.

You will be able to see your TX fee (gas limit*gas price) in ETH & USD when you search for your transaction on etherscan.io. Please note, that this is not a TX fee that MyEtherWallet or any other service provider would receive, but this fee is paid to the miners for mining transaction, putting them in the block format, and thereby securing the blockchain.

Now, when we are talking about gas we think about two things:

1. Gas Limit
2. Gas Price

The total cost of a transaction (the TX fee) is actually gas limit * gas price. Typically, if anybody says “Gas” in the Ethereum context it means, “Gas limit”.

Now breaking down the gas further, you can think about it like the number of litres/gallons/units of gas for a car, etc. You can think of the gas price as the cost of that litre/gallon/unit of gas. Hopefully, you are now able to do the calculations! Sending tokens will approximately take around -50000 gas to -100000 gas, so the total TX fee is about 0.001 ETH to 0.002 ETH.

Gas Limit

The gas limit is called limit because it stands for the maximum amount of the units of gas you are willing to spend on a particular given transaction. This helps in overcoming situations where there is some error in the contract, and you end up spending 1 ETH to 10 ETH to somewhere around 1000ETH and still end up nowhere. Nevertheless, the units of gas required for a transaction is already defined by how much code is executed on the blockchain. If you do not want to spend a lot on gas, lowering the gas limit would be of no help. You have to include a lot of gas in order to pay for the computational resources, otherwise, your transaction will fail to show an “Out of Gas” error.

No need to worry as all unused gas will be refunded to you at the end of every transaction. So if you go to MyEtherWallet, send 1 ETH to their donation address and use a gas limit of say 400000 you will receive 400000-21000 (21000 is the gas limit for standard transactions) back. But, if you send 1 ETH to a contract and your transaction fails, you will use the entire 400000 and receive nothing back.

Gas Price

If you want to spend less on a given transaction, what you can do is, lower the amount you pay per unit of gas. The price you pay for each unit increases or decreases how quickly your transaction will be mined.

During normal times:
1. 40 GWEI Gas price will almost always get you to the next block.
2. 20 GWEI will usually get you within the next few blocks
3. 2 GWEI will usually get you within the next few minutes.

During token creation periods, these costs go crazy due to supply/demand:
1. 50 GWEI is the maximum gas price that most token creation period will accept. Above this, your TX will fail. Check the token creation period you wish to invest in before said token creation period commences.
2. 50 GWEI would be the amount you should be spending in this case.
3. If you are trying to send during a token creation period, but not to the token creation then you have 2 choices: either wait a bit until the token creation period is over or increase the gas price over 50 GWEI.

Now, the transaction fees go to the miners who are mining your blocks. When they mine a block, they are the ones who decide which transaction to include. So, you might think that INCREASING THE GAS PRICE MIGHT GET IT MINED FASTER. The answer is yes. Most miners follow a rule. They consider transactions they received sorted from Highest to lowest gas price, then include them until either the block is full or they reach one that has a Gas price lower than they are wanting to consider. If you are in a hurry then you can set your gas price higher so that you get way ahead of everyone. And if you are not in a hurry, you just need to set a number high enough that your transaction is ultimately included.

It would be good if you set a low Gas price, because one it’s obviously cheaper and two, with the increasing price of ETH compared to USD, a transaction that used to cost half a cent may start costing a few cents. Try sending non-urgent transactions with a lower gas price as the more transactions that occur at the lower gas price, the more it is likely that miners will lower their minimums.

What will happen if I specify too little Gas?

If you specify very little Gas then the transaction will happen and will be in the processing stage. Once the Gas is over, the transaction will cease and the Gas amount in terms of ETH will not be returned back but the main transaction amount will not be affected since the transaction is not added by the miner to the block. So it is always advised to enter Gas limit and price after researching some of the online ETH sites.

Best ETH Miner

A very good miner is miningpoolhub, which accepts a 2 GWEI price, but unfortunately their blocks are always full and they only account around 9% of mining, which means it’s about one in every 10 blocks, which would accept transactions with 2 GWEI gas price and when it does it is full so you have to wait for a few of those.

What is GWEI?

Gas Price is always measured in terms of Gwei. 1 Gwei = 1000000000 Wei. Wei is the smallest unit of Gas. There are other terms available for measuring the Gas which are as follows:
'wei':          '1',
'kwei':         '1000',
'ada':          '1000',
'femtoether':   '1000',
'mwei':         '1000000',
'babbage':      '1000000',
'picoether':    '1000000',
'gwei':         '1000000000',
'shannon':      '1000000000',
'nanoether':    '1000000000',
'nano':         '1000000000',
'szabo':        '1000000000000',
'microether':   '1000000000000',
'micro':        '1000000000000',
'finney':       '1000000000000000',
'milliether':    '1000000000000000',
'milli':         '1000000000000000',
'ether':        '1000000000000000000',
'kether':       '1000000000000000000000',
'grand':        '1000000000000000000000',
'einstein':     '1000000000000000000000',
'mether':       '1000000000000000000000000',
'gether':       '1000000000000000000000000000',
'tether':       '1000000000000000000000000000000'

So for you to understand this working of MEW even better, I have designed an infographic which visually explains you the whole process of the gas limit and gas price.

Handy List Of Sites For Checking Ether Gas Price

1. EthStats
2. Etherscan
3. EthGasStation
4. MyEtherWallet
5. MetaMask Chrome Plugin

This was a short description to make you understand the complicated MyEtherumWallet. Hope this would make your Ethereum wallet experience great!


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