Similar to fiat money, many cryptocurrencies can be broken down into smaller units. For instance, Ether has multiple denominations, with gwei being among the most used ones. Read ahead to learn more about it!
What Is Gwei?
Gwei is a denomination of Ether, the native cryptocurrency of the Ethereum blockchain. Sometimes you may encounter gwei being referred to as “shannon”, “nanoether”, or “nano”. 1 gwei equals one-billionth of an Ether (0.000000001 ETH).
The term “gwei” derives from the combination of the words “giga” and “wei”, the latter being the smallest ETH denomination. There are 1 billion wei in 1 gwei.
Here’s the position gwei takes among other ETH units:
| Unit | Wei Value |
| Wei | 1 |
| Kwei | 1,000 |
| Mwei | 1,000,000 |
| Gwei | 1,000,000,000 |
| Microether | 1,000,000,000,000 |
| Milliether | 1,000,000,000,000,000 |
| Ether | 1,000,000,000,000,000,000 |
What You Need To Know About Gwei
Now that you know the gwei definition and value, let’s talk about its implementation. This unit is most commonly applied to measure gas, which is a pricing mechanism responsible for the fees users pay to complete a transaction or smart contract operation on the Ethereum network.
The idea behind it is that you need miners to spend electricity and time validating your contract and its operations. To facilitate this process, you have to pay gas to the miner who mints your transaction into a block.
The gas fee is not a fixed value – it is determined by supply and demand. A user has to set a gas limit that represents the maximum amount they are willing to spend on a transaction. The standard gas limit that guarantees the transaction’s execution is 21,000 gwei.
Note that if you pay more gwei per unit of gas, it will incentivize miners to include your transaction in a block, which means that it is likely to be processed faster. If you choose to pay less, it could mean that your transaction will take longer to process or even won’t be completed at all.
