Gwei
In simple terms
Gwei is a small denomination of ETH, the way a penny is a small denomination of a pound. Fees are quoted in gwei because quoting them in whole ETH would be a string of zeros.
Definition
The unit fees are usually quoted in on Ethereum — one billionth of one ETH.
In depth
One ether subdivides into 10^18 wei, the smallest indivisible unit. One gwei is 10^9 wei, so 10^9 gwei make one ether. Fee markets quote a base fee and a priority fee in gwei per unit of gas; the total cost of a transaction is gas used multiplied by the gas price in gwei, converted back into ether. Working in integers of wei internally avoids the rounding errors that floating-point arithmetic would introduce into balances.
How does Gwei work?
A wallet shows a gas price in gwei and multiplies it by the estimated gas to display an expected fee, usually converted into local currency. The base fee component adjusts automatically with network demand, rising when blocks are full and falling when they are not, and the priority fee is what a user adds to be selected sooner. Because both move continuously, the same transaction can cost very different amounts an hour apart.
An example
At an illustrative 20 gwei, a 21,000-gas transfer costs 420,000 gwei, which is 0.00042 ETH. At 100 gwei the same transfer costs 0.0021 ETH — five times as much for identical work, purely because the network is busier.
Figures are illustrative only.
What beginners get wrong
- Reading a gwei figure as a currency amount. It is a price per unit of gas, and the fee depends on how much gas the transaction uses.
- Comparing gwei figures across chains. Each network has its own unit economics and its own native asset price.
- Assuming a low gwei price is always better. Below the market rate the transaction simply waits, sometimes indefinitely.
Related terms
Part of
How does a blockchain transaction actually work? — the subject page for blockchain mechanics, with all 15 of its definitions in one place.
Educational only — not financial advice.