What benefits exactly we get from using gas in the network and why do we need it?


Gas is used as an ETH independent unit of accounting.

It let's you define how much a certain operation in the EVM (Ethereum Virtual Machine) should cost in relation to each other. In this sense it is a cost structure.

The benefit is to decouple the incentive structure for cheap opcodes from a certain price. If the value of ETH increases, miners can choose to lower their demand for fees in ether smoothly. So with this, a mining fee market can always adapt to ETH valuation.

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    So who determines the gas price? – Dr. HexBin Jun 3 '16 at 8:26
  • The user that sends a transaction to a contract can pick any gas price, but the miners don't have to accepted it. It is a market. – Roland Kofler Jun 3 '16 at 8:28
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    You mean the miners pay the price and the sender benefits from it? Or it is exactly the other way? excuse me if this is a dumb Q – Dr. HexBin Jun 3 '16 at 8:31
  • No the sender proposes a gasPrice he has to pay. The miner can accept it or refuse it because it is too low. There is a default gas price of 10 Szabo currently. 1 ETH is 1 million Szabo. – Roland Kofler Jun 3 '16 at 8:37
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    Ok, so at the end it's the miner who benefits from the gasPrice right? – Dr. HexBin Jun 3 '16 at 8:39

Ethereum is essentially a single Quasi Turing-complete computer, capable of computation just like any other computer, except for every instruction executed, there must be something expendable known as gas. Gas is essentially a limited resource required to run computation to ensure that every contract will halt/terminate and did not cause Denial of Service.

tl;dr Ethereum Developers' solution for halting problem.

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    This couldn't be done using Ether? Why bother to introduce another factor? – Dr. HexBin Jun 3 '16 at 8:05
  • Gas is priced in ether. – comepradz Jun 3 '16 at 8:22

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