{"id":3038,"date":"2024-10-22T12:52:49","date_gmt":"2024-10-22T12:52:49","guid":{"rendered":"https:\/\/apex-aiexperts.com\/?p=3038"},"modified":"2024-10-22T12:52:49","modified_gmt":"2024-10-22T12:52:49","slug":"what-is-ether-eth","status":"publish","type":"post","link":"https:\/\/apex-aiexperts.com\/es\/what-is-ether-eth\/","title":{"rendered":"\u00bfQu\u00e9 es el \u00e9ter (ETH)?"},"content":{"rendered":"

Ether (ETH)<\/strong> is the built-in currency used in the Ethereum network.<\/p>\n\n\n\n

\"\u00e9ter<\/figure>\n\n\n\n

Like bitcoin (BTC), it can be seen as a digital asset used to store and\/or transfer value<\/strong> on the blockchain.<\/p>\n\n\n\n

Pero ether\u2019s main use case is to facilitate the computation<\/em> of smart contracts and decentralized applications (dApps) on the Ethereum network<\/strong>.<\/p>\n\n\n\n

Anyone looking to build software on Ethereum has to pay for the computing power with ether (ETH).<\/p>\n\n\n\n

An Ethereum node has to execute a transaction on the network and isn\u2019t going to do it for free. Without ETH, you simply cannot do anything on Ethereum.<\/p>\n\n\n\n

This was done by design to solve one of the biggest issues with a Turing-complete machine: the halting problem<\/strong>.<\/p>\n\n\n\n

While a Turing-complete machine is pretty awesome in that it can process pretty much any conceivable computation you throw at it, it doesn\u2019t know when to stop calculating if you don\u2019t tell it to.<\/p>\n\n\n\n

So, if an app is programmed to run in an infinite loop, that app will run forever. Such a scenario would cause major problems or even grind the Ethereum network to a halt!<\/p>\n\n\n\n

To help disincentivize bad actors from running code with infinite loops or spamming the network with computation-heavy contracts, Ethereum imposes transaction fees (paid in ETH)<\/strong> in order to run smart contracts.<\/p>\n\n\n\n

This requirement makes ether a key mechanism in keeping the demand for computational resources on the Ethereum network in check.<\/p>\n\n\n\n

It\u2019s pretty much like gas in a race car. Without gas, the car won\u2019t start. And the bigger the car or harder you push the car to go, the more fuel is needed to maintain speed and reach the finish line.<\/p>\n\n\n\n

If the gas runs out then the car just stops, just like an application when it runs out of ether.<\/p>\n\n\n\n

What is gas?<\/h2>\n\n\n\n

The term \u201cgas\u201d was created to differentiate between the value of ether (ETH) and the computational cost of using Ethereum\u2019s virtual machine (EVM).<\/p>\n\n\n\n

\"Ethereum<\/figure>\n\n\n\n

Gas<\/strong> is how the Ethereum network measures the computational effort required to execute transactions.<\/p>\n\n\n\n

It is called gas because similar to how automobiles need gasoline to operate, the Ethereum network needs gas to keep operating.<\/p>\n\n\n\n

For example, sending 1 ETH from Person A to Person B may require 21,000 gas units. More complex transactions, such as minting an NFT, could demand 2,000,000 gas or higher.<\/p>\n\n\n\n

This means that gas itself is not your transaction fee<\/strong>.<\/p>\n\n\n\n

Gas is a unit<\/strong> used to measure the computational effort<\/strong> necessary to perform specific actions on Ethereum\u2019s blockchain. The transaction fee involves other factors like base fees and priority fees.<\/p>\n\n\n\n

Gas is also not ETH.<\/strong><\/p>\n\n\n\n

The price of 1 gas unit rises when Ethereum\u2019s network is busy and falls during off-peak hours.<\/p>\n\n\n\n

The amount of \u201cgas\u201d required s determined by the supply of mining capacity and the demand for transactions needed to be processed. Since miners can decline to process transactions if the gas price is too low, the gas price must be high enough to outweigh the cost of the computational power needed to process these transactions.<\/p>\n\n\n\n

For example, the price of 1 ETH rises when a lot of people suddenly want NFTs and falls when someone makes a controversial tweet attacking the usefulness of Ethereum. <\/p>\n\n\n\n

Pero gas IS priced in ETH.<\/strong><\/p>\n\n\n\n

Gas price <\/strong>is the amount of ETH it takes to pay for one unit of gas.<\/strong><\/em><\/p>\n\n\n\n

If one unit of gas is priced at 0.000000015 ETH, your transaction requiring 21,000 units would need at least 0.000315 ETH to push through.<\/p>\n\n\n\n

Whoa. That\u2019s WAY too many decimals and so few ETH!<\/p>\n\n\n\n

Others think so too.<\/p>\n\n\n\n

Enter giga-wei or gwei<\/strong>.<\/p>\n\n\n\n

Gwei <\/strong>represents a fraction of 1 ETH.<\/p>\n\n\n\n

Like cents to a dollar, wei<\/strong> is the smallest denomination of ETH. Gigawei<\/strong> translates to 1,000,000,000 wei or 0.000000001 ETH.<\/p>\n\n\n\n

There are other ways to denominate ETH, but gwei<\/strong> is the more commonly used among ETH users.<\/p>\n\n\n\n

In the example above, instead of saying that gas price is at 0.000000015 ETH, you can just say that gas price is 15 Gwei.<\/p>\n\n\n\n

That\u2019s \u201cgwei<\/strong>\u201d more convenient!<\/p>\n\n\n\n

How is the gas fee calculated?<\/h2>\n\n\n\n

Of course, the transaction fee doesn\u2019t just involve gas and gas prices. It also includes the BASE FEE<\/strong>, which is the price required to put one gas unit on Ethereum\u2019s block.<\/p>\n\n\n\n

Base fees are determined by the blocks before it. The base fee can increase by as much as 12.5% per block if the previous block\u2019s transactions used more gas than the target block size allotted for.<\/p>\n\n\n\n

But you don\u2019t just pay for the service. You gotta add a tip, too!<\/p>\n\n\n\n

Remember that miners receive block rewards no matter what\u2019s inside an Ethereum block.<\/p>\n\n\n\n

To incentivize them to compute for su<\/em> transaction and add it to the blockchain, you can add a PRIORITY FEE (or TIP)<\/strong> per gas unit when you input your transaction details.<\/p>\n\n\n\n

And you thought Uber Eats drivers were demanding.<\/p>\n\n\n\n

At this point, your minimum transaction fee would look like this:<\/p>\n\n\n\n

Tx fee = (gas units the transaction requires) x (gas price at least equal to the base fee + tip)<\/strong><\/pre>\n\n\n\n
But what if you executed an uncommon transaction that needed way more gas than you thought? You\u2019ll end up paying waaay more than you originally thought!<\/p>\n\n\n\n
This is why users usually add a gas limit to their input.<\/p>\n\n\n\n
In our fuel example, budgeting for a road trip (executing a transaction) would mean thinking about the price of fuel (gas price) as well as the maximum gallons you think the road trip would need (gas limit).<\/p>\n\n\n\n
\u201cGas Limit<\/strong>\u201d is the maximum number of gas units you\u2019re willing to pay to execute your transaction.<\/p>\n\n\n\n
Using a gas limit ensures that you don\u2019t accidentally spend way more than your budget. You\u2019re protected from a faulty contract code suddenly requiring more gas.<\/p>\n\n\n\n
Alternatively, users have the option to set a MAX FEE LIMIT<\/strong> to tell the network the maximum gwei you\u2019re willing to spend on your transaction.<\/p>\n\n\n\n
Don\u2019t be too stingy with your Gas and Max Limits though! Miners will only use enough gas and gwei to run the transaction and refund you the rest.<\/p>\n\n\n\n
But if a transaction hits its Gas or Max Limit and \u201cruns out of gas\u201d before it is executed, then the transaction will fail and you will lose the gas the miners had already consumed.<\/p>\n\n\n\n
That would be\u2026\u201dgwei\u201d too much waste.<\/p>\n\n\n\n
Factoring in Gas Limits, our new minimum transaction fee formula would look like this:<\/p>\n\n\n\n
Tx Fee = (Gas Limit) * (Base fee + Tip)<\/strong><\/pre>\n\n\n\n
Let\u2019s say that Person A is sending 1 ETH to Person B.<\/p>\n\n\n\n
The simple transaction only requires 21,000 gas but a lot of folks are swapping ERC-20 tokens so the current base fee is 300 gwei. Person A decides to tip 20 gwei to ensure that the 2 ETH is transferred.<\/p>\n\n\n\n
Using the formula above, Person A\u2019s transaction fee is:<\/p>\n\n\n\n
(21,000) x (300 + 20) = 6,720,000 gwei or 0.00672 ETH<\/pre>\n\n\n\n
That\u2019s about $18.84 for transferring 1 ETH (~$3,000)!<\/p>\n\n\n\n
$18.84 may still be a bit steep for some. Luckily, there are efforts to reduce transaction fees.<\/p>\n\n\n\n
Ethereum\u2019s switch to Proof-of-Stake (PoS)<\/strong> consensus algorithm, for example, would reduce the computational requirements per transaction.<\/p>\n\n\n\n
A bunch of Layer 2 scaling solutions<\/strong> also promise to lighten the network load by doing the heavy computation off-chain.<\/p>\n\n\n\n
Most wallets and platforms can automatically estimate the gas and gas prices for your transactions.<\/p>\n\n\n\n
But if you want to practice your transaction fee computing skillz, then you\u2019ll definitely want to check out this cheat sheet!<\/p>\n\n\n\n
Gas<\/td>Unit of measurement for the computational effort miners needs to execute your transaction and record it on Ethereum\u2019s blockchain.<\/td><\/tr>
Block\/Base Fee<\/td>The minimum amount of gas required to put the transaction on the latest Ethereum block. Base fees are \u201cburnt\u201d at the end of each transaction.<\/td><\/tr>
Gwei<\/td>Short for gigawei, a name for a fraction of 1 ETH you need to pay for transaction fees.1 Gwei = 0.000000001 ETHEx: If you\u2019re sending 1 ETH and your total transaction fee is 4230000 gwei (0.00423 ETH), you\u2019ll need to send 1.00423 ETH to successfully execute your transaction.<\/td><\/tr>
Gas Price<\/td>The number of gwei you\u2019re willing to pay for one unit of gas.<\/td><\/tr>
Gas Limit<\/td>The maximum number of gas units you\u2019re willing to pay to execute your transaction.You can adjust how much gas you want to spend but setting a gas limit that\u2019s lower than the total gas needed will lead to your transaction \u201closing gas\u201d and failing.Different types of transactions will require a different minimum gas amount to complete.<\/td><\/tr>
Max fee<\/td>The maximum cost (in gwei) you\u2019re willing to spend on your transaction.After the actual fees and tip have been deducted, the remainder of the max fee will be refunded to the transaction sender.Like in gas limits, setting a max fee lower than the actual fee needed will result in a failed transaction.<\/td><\/tr>
Priority Fee\/Tip<\/td>An additional fee you pay to miners to include\/prioritize your transaction on the blockchain.<\/td><\/tr>
Gas burn<\/td>When users pay for their transactions, their base gas fee gets destroyed (permanently removed from circulation) by the protocol.<\/td><\/tr>
Transaction fee formula<\/td>(Gas Limit) x (Base Fee + Tip)<\/td><\/tr><\/tbody><\/table><\/figure>","protected":false},"excerpt":{"rendered":"
Ether (ETH) is the built-in currency used in the Ethereum network. Like bitcoin (BTC), it can be seen as a digital asset used to store and\/or transfer value on the blockchain. But ether\u2019s main use case is to facilitate the computation of smart contracts and decentralized applications (dApps) on the Ethereum network. Anyone looking to build software on Ethereum has to […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[37,12],"tags":[],"class_list":["post-3038","post","type-post","status-publish","format-standard","hentry","category-beginners-guide-to-ethereum","category-learn-crypto"],"_links":{"self":[{"href":"https:\/\/apex-aiexperts.com\/es\/wp-json\/wp\/v2\/posts\/3038","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/apex-aiexperts.com\/es\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/apex-aiexperts.com\/es\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/apex-aiexperts.com\/es\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/apex-aiexperts.com\/es\/wp-json\/wp\/v2\/comments?post=3038"}],"version-history":[{"count":1,"href":"https:\/\/apex-aiexperts.com\/es\/wp-json\/wp\/v2\/posts\/3038\/revisions"}],"predecessor-version":[{"id":3039,"href":"https:\/\/apex-aiexperts.com\/es\/wp-json\/wp\/v2\/posts\/3038\/revisions\/3039"}],"wp:attachment":[{"href":"https:\/\/apex-aiexperts.com\/es\/wp-json\/wp\/v2\/media?parent=3038"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/apex-aiexperts.com\/es\/wp-json\/wp\/v2\/categories?post=3038"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/apex-aiexperts.com\/es\/wp-json\/wp\/v2\/tags?post=3038"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}