Everything You Need to Know About Gwei

Gwei explained for anyone with little to no crypto knowledge!

Ethereum has been making headlines for its high gas fees. Yet, many of us might not be fully aware of what the transaction fee mechanism is. So, let’s take a closer look at the smallest percentage of Ethereum cryptocurrency. It is known as Gwei, which is an abbreviation for GigaWei. 

Thus, if you’re a crypto enthusiast on the Ethereum blockchain, it is best to understand the mechanism of Gwei. Any smart contract, Dapp, and token you use on ERC20 can cut a small percentage from each transaction. Therefore, keeping a track of each step can help follow how Gwei is involved in buying, selling, and other transfers. 

What is Gwei?

Gwei is a combination of two words: Giga and Wei. It is a term used in the cryptocurrency community to describe a small percentage of Ethereum. Many people in the Ethereum network are not aware of Gwei. This value equates to a total of 0.000000001 ETH. 

For instance, if you pay 0.000000040 ETH as the gas fee, it costs 40 Gwei. Think of it as the smallest subunit of the Ethereum coin. So, one Gwei is equal to 1 billion Wei. 

The American mathematician and computer scientist Claude E. Shannon has laid the foundation for the information theory used for Gwei. Therefore, many individuals in the Ethereum blockchain have accredited her for it. So, Gwei is sometimes referred to as Shannon as well. 

Is Gwei the only measure used for Ethereum?


Many might think that Gwei is the only unit to measure small percentages of Ether tokens. But in reality, there are smaller and bigger units as well. Here are all the other units that exist on the Ethereum blockchain:

  • Wei – It is named after Wei Dai who invented the prototype of Bitcoin. 
  • Kwei – It is named after the mathematician and mechanical engineer, Charles Babbage. 
  • Mwei – It is named after the computer programmer and mathematician, Ada Lovelace. 
  • Gwei – It is named after the mathematician and cryptographer, Claude Shannon. 
  • Twei – It is named after the computer scientist and cryptographer, Nick Szabo. 
  • Pwei – It is named after the initial developer of Bitcoin, Hal Finney. 
  • Ether – It is named after the creator of Ethereum, Vitalik Buterin. 
Image: Investopedia

Think of all the units as the smallest denomination of the token. Ether is the biggest and Wei is the smallest, just like cents are to a dollar. Cryptocurrencies are just like fiat currencies, such as dollars and euros. They can be broken down into smaller subunits to make one whole token. 

How Can You Calculate Gwei Fees?

You can calculate Gwei fees with a simple formula. Usually, the standard charges are around 21,000 Gwei. But if you want to be precise, here is the formula:

Gas Units (Limit) x (Base Fee + Tip)

Are There Alternatives to Gwei in Ethereum?

There are no alternatives to paying Gwei when buying and selling on the Ethereum blockchain. But if we look at other cryptocurrencies, then we may see lower costs. This is because Ethereum has a high gas fee. 

Other tokens, such as Litecoin, Cardano, Matic, and Solana may have bare minimum transaction fees. However, many Ethereum users have used hacks to reduce the fees. You may have to wait for lower traffic on the blockchain. 

For instance, the average gas fee was quite high in December 2021. It was around 106 Gwei, which was nearly $9.70. Nevertheless, the price was lower in July 2021. The transaction fee was almost 40.66 Gwei. This way many Ethereum users have saved on high fees. 

But transactions will speed up and transaction prices will be lower in the future. This can all be possible due to the major update, Ethereum 2.0

Is Gwei Used in Other Cryptocurrencies?

No, Gwei is not used in other cryptocurrencies. The interesting part is that each blockchain has its own denominations. Many are trying to provide low-fee alternatives to give Ethereum a run for its money. This is only possible in the case of alternative networks or currencies. 

So, many developers have run parallel side blockchains to the Ethereum network, like Polygon. It has intrigued a lot of crypto enthusiasts. This is because the transaction fee is almost nonexistent. You just have to pay 0.0001 Matic on the Polygon network

Final Thoughts – The Importance of Gwei for Crypto Enthusiasts

Gwei might not seem quite significant for other blockchain users. But crypto investors on the Ethereum network know how a couple of 100 Gwei can add a significant amount to the gas fee. Hope this article helped understand Ether’s denomination. 


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