- Gwei is a unit of gas that is used in the Ethereum network. Gas is used by miners to process transactions and it is one of the key differences between Ethereum and other cryptocurrencies like Bitcoin.
- “The amount of gas you need depends on how large of a contract you’re trying to execute and how fast you want to execute it.” If you’re willing to wait for a transaction to complete, the price typically drops. Understanding this concept is important for both NFT art creators and collectors alike.
- To get technical: gas fees are paid in Ethereum’s native currency, ether (ETH). Gas prices are denoted in Gwei, which itself is a denomination of ETH – each Gwei is equal to 0.000000001 ETH (10-9 ETH). For example, instead of saying that your gas costs 0.000000001 Ether, you can say your gas costs 1 Gwei.
- Ethereum’s gas is an essential regulator that prevents anyone from spamming the network. All computation over Ethereum stretches a measure meant to maintain security in place. Gas limits, paid for by each computational execution, help make sure that malicious individuals can’t use unsorted loads of computation power to become de-facto coders on the Ethereum network and hijack the future they helped build together.
- Gas is a double-edged sword. When gas prices are high, it becomes prohibitive for up and coming artists to create, mint, and even buy other pieces of work. Some artists attempt to price in the cost of gas into their works (meaning they are willing to lower the overall cost of their art, making it more accessible.) This presents a catch-22 as the perceived “value” of the art is diminished when collectors are deciding if they’re willing to spend 25-57% of the total acquisition cost on gas fees. Which presents a challenge for artists trying to make a name for themselves. On the other side of the coin, artists may overcharge for their art (paying larger marketplace fees and gas fees) to publish their art before they have a reputation of being able to charge that much.
- In some scenarios we’ve seen gas prices even exceed the price of a piece of art that is being created making it irresponsible for an artist to even mint their art online.
- Finally, it’s important to understand that not all transactions use the entirety of the gas. This could be explained better and we need to do deeper analysis to understand what percentage of gas is returned on average. But essentially, you’re agreeing to a maximum prices of gas fees you’ll spend to complete the transaction.
- You always pay GWEI when purchasing NFTs. The more GWEI you pay, the faster will your transaction get confirmed!
- At very hyped drops the Gwei really goes to a very high price...For example: There's a drop with a collection of 10,000 NFTs. When 2000 get sold the GAS price is pretty low as the people are not buying too fast, so you only pay around $10-20 per transaction. Once it reaches 7000 sales, the people start buying in as they see the hype on the collection... That means the gas skyrockets to $20-50 per transaction.