Blockchain Developer Certification Practice

What does the gas price represent in Ethereum transactions?

1. Amount of gas used in a transaction

2. How much wei you are willing to spend for each unit of gas

3. The total cost of a transaction

4. The maximum amount of gas for a transaction

The correct answer is: How much wei you are willing to spend for each unit of gas

The gas price in Ethereum transactions specifically represents how much wei you are willing to pay for each unit of gas. Gas is a measurement used to quantify the computational effort required for transactions on the Ethereum network, and it is measured in units. The gas price, therefore, directly impacts the total cost of a transaction; it defines the price of each unit of gas expressed in wei, which is the smallest denomination of Ether (ETH). When you initiate a transaction, you set a gas price, indicating how much you are willing to pay miners to process your transaction. Miners prioritize transactions with higher gas prices, ensuring that these transactions are processed more quickly. The combination of gas price and the total amount of gas used determines the total fee paid for the transaction, but the gas price itself is solely about the cost per unit of gas. Understanding this concept is crucial for anyone working within the Ethereum ecosystem, as it affects transaction confirmation times and costs. Notably, the other options touch on related concepts but do not accurately describe what the gas price specifically entails.