Gas is the measure of cost to perform an operation in the blockchain. This relative to the computational cost of the specific operation.

Ethereum Docs gives us the list of opcodes and their respective gas cost.

Though the gas ‘cost’ is fixed, the actual ‘price’ of gas(measured in Gwei) is ever-changing. This is often compared with the analogy of a car and gasoline price. Every car has a ‘fixed’ cost for the amount of gas that is needed to run from point A to B. However, the price of that fixed quantity of gasoline is ever-changing.

Operations that create or modify the persistent memory like SSTORE takes up 2000 gas, while simple arithmetic operations like ADD takes up only 3 gas.

The gas costs are a representatives of the amount of strain the operation takes on the blockchain network.

Every block has a maximum amount of gas that can be used within it which is how the number of transactions included in a block is determined.

Each block has a capacity to use 30 million gas , but has a target of 15 million gas total.

The price of gas is determined by the demand for transactions. This demand is determined by how filled the previous block was in relative to the target gas.

The network first sets a base fee. In an ideal scenario, this base fee would result in the 15 million gas being used in a block, no less, no more.

However, in reality , the actual gas can go above or below the target gas.

When the blocks are above target, the gas price( or the base fee) is automatically increased, increasing the cost and thereby the barrier to send a transaction, thus reducing the number of transactions and people trying to transact.

When the block is below the target, the base fee is lowered to incentivize people to transact more by lowering the barrier to entry in paying for a transaction.

This base fee helps users select an efficient gas amount that is likely to get their transactions mined, without overpaying.It also helps us predict future gas price, depending on how full the previous blocks were.

Instead of going directly to the miner, the base is actually burned. There are 2 primary reasons for it:

1. It prevents the miner from circumventing the payment of the base fee to be higher to their advantage, since they have to pay at least base fee * no of transactions for the block that they mine.

2. Burning Ether creates deflationary pressure on the asset since its supply is being taken out of the market.

When you are sending a transaction, you are not setting the ‘base fee’ , but the ‘max fee’ which represents the maximum amount you are willing to pay to get your transaction included. Your transaction will only ever use base fee**amount to execute, the rest of the value (max fee - base fee) is returned to you.

By tip! The minertip is the minimum amount that the miner is willing to accept to execute your transaction. The tip was initially set to 1gwei, but can fluctuate depending on how full the blocks are. Since the target gas value in blocks is 15 million, as long as blocks hit the near target amount, there will always be room to add more transactions within a block. Hence the miner tip does not have to be very high.

So, when you set the gas for your transaction, you are setting the ‘maxPriorityFee’ which is (max fee + miner tip).

Learnt something interesting? Consider Minting this entry :)

Gas is the measure of cost to perform an operation in the blockchain. This relative to the computational cost of the specific operation.

Ethereum Docs gives us the list of opcodes and their respective gas cost.

Though the gas ‘cost’ is fixed, the actual ‘price’ of gas(measured in Gwei) is ever-changing. This is often compared with the analogy of a car and gasoline price. Every car has a ‘fixed’ cost for the amount of gas that is needed to run from point A to B. However, the price of that fixed quantity of gasoline is ever-changing.

Operations that create or modify the persistent memory like SSTORE takes up 2000 gas, while simple arithmetic operations like ADD takes up only 3 gas.

The gas costs are a representatives of the amount of strain the operation takes on the blockchain network.

Every block has a maximum amount of gas that can be used within it which is how the number of transactions included in a block is determined.

Each block has a capacity to use 30 million gas , but has a target of 15 million gas total.

The price of gas is determined by the demand for transactions. This demand is determined by how filled the previous block was in relative to the target gas.

The network first sets a base fee. In an ideal scenario, this base fee would result in the 15 million gas being used in a block, no less, no more.

However, in reality , the actual gas can go above or below the target gas.

When the blocks are above target, the gas price( or the base fee) is automatically increased, increasing the cost and thereby the barrier to send a transaction, thus reducing the number of transactions and people trying to transact.

When the block is below the target, the base fee is lowered to incentivize people to transact more by lowering the barrier to entry in paying for a transaction.

This base fee helps users select an efficient gas amount that is likely to get their transactions mined, without overpaying.It also helps us predict future gas price, depending on how full the previous blocks were.

Instead of going directly to the miner, the base is actually burned. There are 2 primary reasons for it:

1. It prevents the miner from circumventing the payment of the base fee to be higher to their advantage, since they have to pay at least base fee * no of transactions for the block that they mine.

2. Burning Ether creates deflationary pressure on the asset since its supply is being taken out of the market.

When you are sending a transaction, you are not setting the ‘base fee’ , but the ‘max fee’ which represents the maximum amount you are willing to pay to get your transaction included. Your transaction will only ever use base fee**amount to execute, the rest of the value (max fee - base fee) is returned to you.

By tip! The minertip is the minimum amount that the miner is willing to accept to execute your transaction. The tip was initially set to 1gwei, but can fluctuate depending on how full the blocks are. Since the target gas value in blocks is 15 million, as long as blocks hit the near target amount, there will always be room to add more transactions within a block. Hence the miner tip does not have to be very high.

So, when you set the gas for your transaction, you are setting the ‘maxPriorityFee’ which is (max fee + miner tip).

Learnt something interesting? Consider Minting this entry :)