Gwei is an insignificant unit of measurement for Ether (ETH), which is the main cryptocurrency of Ethereum’s blockchain. It is typically used to indicate the gas fees which are the amounts that the users have to pay for the transfer of their transactions or conducting smart contracts on the network. One Gwei is equivalent to one billionth of an Ether.
The use of Gwei facilitates the discussion of transaction fees without the hassle of long decimal numbers. Users and wallets simply say it costs 25 Gwei instead of the more complex phrasing of saying a transaction costs 0.000000025 ETH. This unit has become the common language through which Ethereum users communicate regarding the fees of the network.
Gas prices fluctuate relative to the network’s traffic. More specifically, when demand is high, e.g., during a popular NFT mint or a big market move Gwei prices will increase as users will be competing to get their transactions done faster. Conversely, if the network is less active, Gwei measured in gas fees will normally be lower.
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It is a common practice to show the gas price in Gwei on most Ethereum wallets and block explorers because it is more understandable and user-friendly. Although users hardly ever think of Gwei as a distinct form of currency, in truth, every Ethereum transaction has it as an operative unit behind the scenes.
To put it simply, Gwei is the unit which indicates to the users the current price for using Ethereum, whether it is cheap or expensive.