Recently, a question has been asked very frequently: What exactly is Ethereum's Gas? I found that there are all kinds of explanations online—some say it's consumption, some say it's a fee. Beginners often find it confusing. Actually, just remember one simple formula: Fee = Quantity × Price. This logic can help you understand all concepts related to Gas.

For example, if you drive from point A to point B and consume 10 liters of fuel, costing 8 dollars per liter, then the fuel cost is 80 dollars. Ethereum works on the same principle. To send a token, it requires 21,000 units of Gas, and if the Gas price is 100 Gwei, then the Gas fee is 21,000 multiplied by 100, which equals 2,100,000 Gwei. Easy, right?

So, what exactly is Gas? Gas translates to fuel, and in the Ethereum network, it is a proprietary concept representing the fuel needed to execute operations. You often hear people say "Gas is now 5 dollars each" or "Gas has skyrocketed to 200," but in this context, Gas is neither quantity nor price; it’s a unit concept.

Next, let's talk about Gas Limit. This is the maximum amount of Gas you're willing to pay. For example, a transfer might actually require 21,000 Gas, but if you set the Gas Limit to 50,000, the remaining 29,000 will be automatically refunded. Conversely, if the actual required Gas is 51,000 but you only set 50,000, the transaction will fail, and the 50,000 Gas you set will not be refunded. So, trying to save Gas by lowering the Gas Limit often backfires. Usually, wallets like MetaMask will automatically suggest a reasonable Gas Limit, so you don't need to manually adjust it.

Then there's Gas Price, which is the unit price of Gas. It’s usually expressed in Gwei, which is a denomination of ETH. 1 Gwei equals 0.000000001 ETH. Why use Gwei instead of ETH? Because saying "Gas price is 10 Gwei" is much more convenient than "Gas price is 0.00000001 ETH," just like saying "the nail is 1 centimeter long" is more natural than "the nail is 0.00001 kilometers long."

Now, let's calculate the Gas fee. The Gas fee is the actual amount you pay, calculated as Gas Limit multiplied by Gas Price. Suppose the Gas Limit is 21,000 and the Gas Price is 63.97 Gwei, then the fee is 21,000 × 63.97 = 1,343,454 Gwei. Converting to ETH, that’s about 0.0013434 ETH. This formula is very important—once you understand it, you can estimate the cost of each transaction yourself.

Since the London upgrade in 2021, the Gas Price mechanism has changed. It now includes two parts: base fee and Max priority fee. The base fee is the fundamental cost, which fluctuates in real-time based on network congestion. The Max priority fee is a tip you can adjust to prioritize your transaction, similar to tipping a driver for faster service. The Max fee is the sum of these two, roughly equivalent to the previous Gas Price.

Why does Ethereum need Gas? In short, free transactions are often the most expensive, and paying a fee can sometimes be the best option. Without the Gas mechanism, the network would be flooded with spam transactions.

Why are Gas prices sometimes so outrageous? Because Ethereum's block space is limited, especially during hot projects or NFT rushes, everyone is competing to get on-chain, causing Gas prices to spike sharply. The best strategy during these times is to wait or switch to Layer 2 solutions.

To reduce Gas costs, first check the current Gas price before making a transaction. Second, choose to operate during off-peak hours—usually from afternoon to evening, when prices are more stable, and avoid times like 7 PM to early morning when prices tend to rise. Third, consider using Layer 2 networks like Polygon or sidechains, where Gas fees are much lower, sometimes even ridiculously cheap. Especially when doing airdrops or interactions, using Layer 2 can save a lot of Gas. That’s why many people are using Polygon.