Table of Contents
Table of Contents

Gwei

What Is Gwei?

Gwei is a portmanteau (a blend of words) of giga and wei. 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 users transact to buy and sell goods and services without a middle man or interference from a third party.

Similar to fiat currencies like the U.S. dollar or euro, ether is broken into denominations. 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; there are one billion gwei to one ether.

Key Takeaways

  • Gwei is a denomination of the cryptocurrency ether (ETH), used on the Ethereum network to buy and sell goods and services.
  • Gwei is the most commonly used ether unit because it is easier to specify Ethereum gas prices in gwei.
  • Some cryptocurrencies have high market values, so many have adopted naming conventions for their denominations because the smaller units are used more often in transactions.

Understanding Gwei

Gwei is also called nanoether—nano is the prefix used to denote one-billionth of something. Some cryptocurrencies have such high fiat currency exchange rates that tiny denominations have become necessary. These micro-denominations allow for a cryptocurrency's market value to grow as high as supply and demand will take it while allowing for smaller transactions.

Gwei is the most commonly used ether unit because it is how "gas" prices are denoted. Gas is the term used in the Ethereum network for transaction power. For a transaction to occur, you need to give it some gas, which costs gwei. Gas fees are payments made by users to compensate the miners and validators for the computing energy required to process and validate transactions on the Ethereum blockchain.

It's important to note that Ethereum is constantly evolving, so there are many denominations in use currently that are not in the yellow papers maintained by the Ethereum developers and community.

The table below displays the typical ether units (with Gwei highlighted in blue). 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 Denominations Explained

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. Mostly, it's the fans and insiders of Ethereum who use these nicknames; but it's interesting to note that Ethereum uses cryptic language and naming conventions, just like Bitcoin does.

Ethereum-based denominations used by fans

Investopedia / Sabrina Jiang

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 (cabbage): 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 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 and writer—he created Ethereum.

What Is Gwei to ETH?

Gwei is a denomination of the cryptocurrency ether, powered by the Ethereum ecosystem. There are one billion gwei per ether (ETH).

What Is Gwei Gas Price?

Gwei gas price is the fee paid to the network and transaction validators for the computational work of verifying a transaction. The standard transaction fee is 21,000 gwei.

How Are Gwei Fees Calculated?

The standard transaction fee in the Ethereum network is 21,000 gwei. More complex transactions can cost more. You can calculate a transaction fee using the formula Gas Units (Limit) x (Base Fee + Tip).

Investing in cryptocurrencies and other Initial Coin Offerings (“ICOs”) is highly risky and speculative, and this article is not a recommendation by Investopedia or the writer to invest in cryptocurrencies or other ICOs. Since each individual's situation is unique, a qualified professional should always be consulted before making any financial decisions. Investopedia makes no representations or warranties as to the accuracy or timeliness of the information contained herein.

Article Sources

Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy.
  1. Gavin Wood. "Ethereum: A Secure Decentralised Generalised Transaction Ledger," Page 2. Accessed Jan. 9, 2022.

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