Why is it important to know about these fundamentals? What is a Smart contract? Ether? Gwei? Gas? And Miners?

September 3, 2018

Smart contract- Is a computer program that stores rules for negotiating terms of a contract. It’s a real contract that has an agreement between the buyer and the seller but in digital form. Smart contracts also automatically verify the contract and then execute then records the agreement once the requirement is met inside a BLOCKCHAIN.

ETHER- Is the fuel of the Ethereum platform that keeps the decentralized application(DAPP) working. It is also known as the currency of the Ethereum platform.

 

GWEI- is a denomination of ETHER (ETH). The average gas price that awarded to miners is 20 GWEI, but it will increase if there is a lot of transaction competing to be added in the next block. 1 ETH= 1,000,0000,000 GWEI.

 

Example: In order to transfer 1.2 ETH, we need 21,000 GAS. GAS price is 18 GWEI.  =>Miner will get = 21,000 x 18 = 378,000 GWEI = 378,000/1,000,0000,000 = 0.000378 ETH

 

GAS - is the fuel of the Ethereum platform. In order to have a transaction conducted, a few coding steps need to be executed and recorded on the Ethereum Blockchain. They can only be executed when users pay GAS fee for each step. People who pay more GAS fee will get their transactions conducted earlier. To sum up, GAS is designed to distribute resources within the Ethereum Platform. Miners take GAS fee and then later transfer to GWEI. They can stack up GWEI to exchange for Ethers. The exchange rate between GAS and GWEI is unstable.

 

 

Miners-are people who validate all the transaction in a BLOCKCHAIN. If a transaction is proven correct, The miners store the data or details of the said transaction in a new block. Miners get incentives and transaction fees for making sure the transaction is legit.

 

 

 

But, wait..Where do peoples store their CRYPTOCURRENCIES?

 

Follow me on my next article to find out where do people store their cryptocurrencies.

 

Also, check out this Ethereum Wallet: HB Wallet

This wallet supports users to store Ethers, ERC20 and ERC223 Tokens. We can also receive free airdrops and use other amazing functions! It is Fast, Secure and Easy to use!

Get it here for FREE! https://www.hb-wallet.com/download

 

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