[Zhikuang University Q&A] How to set the mining fee to save money when transferring Ethereum?

Answer from @JackyLHH, editor of Zhikuang University:

Ethereum wallet may be the most frequently used cryptocurrency wallet. Especially with the recent DeFi liquidity mining craze, many users who never used wallets before have transferred their coins to their own wallets to provide liquidity.

Now, the craze for liquidity mining has faded, and the average price of Gas on the Ethereum network has returned from the previous peak of 709 Gwei to the current 50 Gwei, but driven by BTC, the price of ETH is still challenging the highest level of the year. The price of ETH has risen, and from the perspective of the fiat currency standard, the mining fee required for transfer has become more expensive.

Do you know how much ETH mining fees a certain wallet address of yours has spent in total?

The following URL can help you search:

https://fees.wtf

For example, to check how much mining fees the address "0xD58189F5E858A6F67319E33Fa1107eb7e679989f" has spent, you can directly add this "address" to the above URL for query according to the following format:

https://fees.wtf/?address=0xD58189F5E858A6F67319E33Fa1107eb7e679989f

Through the query, we can find out that this wallet address has spent a total of 0.484 ETH in mining fees. According to the current price, it is worth $213.92, which is a considerable expense.

So, the question is, how to set the mining fee for Ethereum transfers to save money?

Before answering this question, let us first understand three concepts in the Ethereum network: Gas, Gas Price, and Gas Limit.

Ethereum itself is a decentralized virtual machine, which is equivalent to a world-class computer network when combined. On the Ethereum network, every calculation, every byte of storage, and any operation on the chain (wallet transfer, contract call, data writing, etc.) requires the participation of computers across the network.

There is no free lunch in the world. All of the above operations require the consumption of corresponding network resources, so corresponding fees must be paid to miners. In the Ethereum network, this fee is called "Gas fee (fuel fee)", more commonly known as "miner fee" or "handling fee". It should be noted here that Gas is not a new token, but a unit of measurement.

The Ethereum system has pre-defined Gas consumption for each of the operations mentioned above. For example, a Copy operation consumes 3 Gas, and a SHA3 hash consumes 30 Gas. For ordinary transfers, the Ethereum system stipulates that 21,000 Gas is required.

Figure: https://github.com/ethereum/go-ethereum/blob/master/params/protocol_params.go

Gas Price refers to the price you are willing to pay for each unit of Gas consumed. The unit of Gas Price is usually expressed in Gwei, 1 Gwei = 0.000000001 ETH.

Gas Limit refers to the upper limit of the amount of Gas you are willing to pay for this operation. By default, the Gas Limit is 21,000 Gas. Generally, we do not need to adjust the Gas Limit value, but for more complex operations, such as "carving" on the Ethereum blockchain, we need to adjust the Gas Limit, otherwise the Gas amount will be consumed before the work is completed.

Figure: In the "Love on Chinese Valentine's Day, You Are on the Chain" event of Zhikuang University, the actual amount of Gas consumed by a certain on-chain content was 22632 Gas, so the Gas Limit was adjusted to 42000 Gas in advance.

Why does the Ethereum system set the Gas Limit parameter? On the one hand, it is to prevent some buggy programs from falling into an infinite loop (automatically stopping after consuming the Gas amount), and on the other hand, it is to prevent a certain operation from exhausting all the ETH in the account.

Now that we understand these three concepts, let’s take a look at the Ethereum mining fee calculation formula:

Miner Fee = Actual Gas Consumed * Gas ​​Price

Among them, the "actual amount of Gas consumed" is less than or equal to the Gas Limit, which is easy to understand.

As mentioned above, the Ethereum system has regulations on how much Gas is consumed for each computational step, so we cannot adjust the "actual amount of Gas consumed", but we can adjust the "Gas Price".

Ethereum miners, like Bitcoin miners, are profit-seeking. They will give priority to those who offer a higher Gas Price for packaging and confirmation. Therefore, when encountering a particularly urgent situation that requires immediate confirmation, we need to give a higher Gas Price so that miners can package and confirm it for us as soon as possible; in non-urgent situations, we can lower the Gas Price to save unnecessary mining fees.

Nowadays, many wallets are very "smart" and can tell you the recommended value of Gas Price by analyzing the current network congestion. Of course, you can also adjust the Gas Price manually, and the wallet will tell you how long it will take to be packaged by miners after the adjustment.

In addition to the Gas Price values ​​recommended by the wallet, you can also refer to the values ​​given by the Gas Now website:

https://gasnow.sparkpool.com

As shown in the above picture, at the moment of the screenshot, if you want to be confirmed by miners within 15 seconds (that is, the next block), you can set the Gas Price to 32 Gwei. If you are not in a hurry, you can choose the "slow" mode and set it to 16 Gwei. Usually, you can choose the mining fee recommended by the "normal" mode.

Gas Now is the current largest Ethereum mining pool, Spark Mining Pool. It gives recommended values ​​based on the Gas Price distribution of real-time transactions in the mining pool node transaction pool. Its data is more real-time, accurate, and more valuable for reference. Recently, wallets such as imToken, Maizi Wallet, MYKEY, TokenPocket, and Trust Wallet have announced the use of Gas Now's services.

Finally, let’s summarize today’s content:

1. The mining fee for Ethereum transfer is the product of the "actual amount of Gas consumed" and the "Gas Price". The former is predetermined by the system, and the latter can be adjusted by ourselves to reduce unnecessary mining fee expenses.

2. When adjusting the "Gas Price", you can refer to the recommended value given by the wallet, or you can refer to the Gas Now website which is more real-time and accurate.

3. In addition, if more complex operations are involved, you need to adjust the Gas Limit value to prevent the Gas from being consumed before the work is completed.

Risk warning: The content of this article is only the author’s personal opinion, does not represent the views or position of Zhikuang University, and does not constitute any investment opinion or recommendation.