Definition
The meaning of Gwei is derived from a portmanteau of “Giga” and ”Wei” is a denomination of Ether, the native cryptocurrency of the Ethereum network. Along with ETH, it is a commonly used denomination of Ethereum, particularly useful when expressing gas prices.
Understanding the Term
In crypto, Gwei is the smallest denomination of Ether (ETH). Also known as nano-ether, Gwei is a micro denomination, which makes it possible for any crypto currency’s value to grow as high as supply and demand dictates while allowing smaller transactions. One unit of Gwei is equal to one-billionth of one ETH (or 0.000000001 or 10-9 ETH).
Gwei is just one of the denominations of ETH, with some of the others being Mwei, Kwei, and Wei. Gwei is most commonly used for expressing gas prices. For executing a transaction, gas is required, which can only be purchased by using Gwei. The standard transaction fee in the Ethereum network is 21000 Gwei, although complex transactions require more Gwei.
Takeaway
Gwei is an ETH denomination that is exclusively used on the Ethereum network. It is the easiest way to specify Ethereum gas prices, the mechanism responsible for calculating fees when performing a transaction or executing a contract option inside the Ethereum network.