Getting to grips with fractional amounts of ETH with lots of zeros after the decimal point can be a real chore. This is what makes Gwei so handy.
A Gwei is a measure of small amounts of ether (ETH), the Ethereum blockchain’s native currency. You’ll see and hear Gwei mentioned frequently in relation to ETH because it makes discussions about gas a lot more comprehensible. All work on Ethereum is priced in Gas, and the system behind it calculates how much someone should be paid for performing a transaction or for doing something that’s required by a smart contract.
A Gwei is one-billionth (or one Nano) of an Ether. This means that one Gwei is equal to 0.000000001 or 10-9 ETH, and that one ETH is equal to one billion (109) Gwei.
There are quite a few other denominations of ether, and each one represents a multiple of wei (the smallest ETH unit):
You can try thinking of it this way: as ETH is to the US dollar, so Gwei is to cents (although it’s a billionth rather than a hundredth). It’s ideal for measuring fractional values of the whole currency unit in a way that’s easier to comprehend, so calculating the gas price becomes much more straightforward.
If you hear terms like a Shannon, NanoEther or Nano then they’re still talking about Gwei. These are just alternative names. Shannon comes from the mathematician and cryptographer, Claude Shannon, who is recognized as a pioneer of Information Theory.