What Is Gwei?

Gwei is a denomination of the cryptocurrency ether (ETH), the digital coin used on the Ethereum network. Ethereum is a blockchain platform, like Bitcoin, where us๊ers transact to buy and sell goods and services without an intermediary or interference from a third party.

Similar to fiat currencies like the U.S. dollar or euro, ether is broken into denominations. 澳洲幸运5官方开奖结果体彩网:Wei is the smallest denomination of ether like cents are to the U.S. dollar. However, while there are 100 cents in a dollar, there is one quintillion wei (18 zeros) to one ether and one billion gwei to one ether.

Understanding Gwei

The Ethereum platform has a native cryptocurrency known as ether (ETH). Ethereum itself is a blockchain that supports a wide range of decentralized applications (dApps), sidechains, and programs—allও of which can be used to develop other cryptocurrencies.

Ethereum (the blockchain) processes the transaction for these other applications, and users pay for the processing in ether. These fees are payments made by users to compensate the𝓰 validators for the computational and storage resources they provide for the Ethereum Virtual Machine.

The fees are priced in small fractions of ether, so denominations were needed to 🍨make it economical to charge transaction fees. There are seven denominations used ꦕon the Ethereum network. Gwei is the middle denomination, making it simpler to use and understand because it can be used to express values above and below it.

For instance, on May 5, 2024, the median transaction fee of the Ethereum blockchain was five Gwei. You could've said, "The gas price was 0.000000005 ETH," but it is much easier to say five gwei. You could also use any of the other denominations, but most users comprehend gwei better.

Ether Denominations Explained

The list below displays the typical ether units. Notice in the table that the denominations each have an alternate name (in parentheses)—based on influential figures in the world of cryptography. For example, gwei may also be called shannon, after Claude Shannon, an American mathematician, cryptographer, and crypto-analysis guru.

Ether's naming convention is a nod to its founding figures, much like a $100 bill features an image of Ben Franklin and a $5 bill pictures Abraham Lincoln. It's interesting to note that Ethereum uses cryptic language and naming conventions, just like Bitcoin does.

Here, in order of appearance in the table, is the significance of the ether units' nicknames:

• Wei (wei): For Wei Dai, who formulated the concepts of all modern cryptocurrencies—best known as the creator of the predecessor to Bitcoin, B-money.
• Kwei (babbage): For Charles Babbage, a mathematician, philosopher, inventor, and mechanical engineer—designed the first automatic computing engines.
• Mwei (lovelace): For Ada Lovelace, mathematician, writer, and computer programmer—she wrote and published the first 澳洲幸运5官方开奖结果体彩网:algorithm.
• Gwei (shannon): For Claude Shannon, an American mathematician, cryptographer, and crypto-analysis guru—also known as "the father of information theory."
• Twei (szabo): For Nick Szabo, a computer scientist, legal scholar, and cryptographer—known for his pioneering research in digital contracts and digital currency.
• Pwei (finney): For Hal Finney, a computer scientist and cryptographer—he was one of the early developers of Bitcoin, and alleged to be the first human to receive a bitcoin from Satoshi Nakamoto, the named founder of Bitcoin.
• Ether (buterin): For Vitalik Buterin, a programmer, writer, and the creator of Ethereum.

The Bottom Line

The blockchain and global virtual machine Ethereum has a native token called ether. Ether is further divided into smaller denominations to make it easier to express them. Gwei represents the middle denomination that is easiest to express values in. One gwei is equܫal꧂ to 0.000000001 ETH.

Transaction fees, also called gas on Ethereum, are charged in gwei, making their small amounts easier to comprehend.

The comments, opinions, and analyses expressed on Investopedia are for informational purposes only. Read our  for more info. As of the date this article was written, the author does not own cryptocurrency.