ETH to Wei: Understanding Ethereum Denominations

When you work with Ethereum, sooner or later you will come across terms like gwei, wei, and microether. These are just different ways of expressing one currency – ether (ETH). In order not to get confused in these denominations, it is worth understanding their structure and interconnection.

From Wei to Ether: The Complete Hierarchy of Denominations

The smallest unit of Ethereum is wei. Think of wei as the smallest “atom” of ether. Here's how it looks in numbers:

Thus, converting eth to wei is simply multiplying by 10 to the power of 18. One ether is equal to one quadrillion wei (10e18). Conversely, one wei is equal to 0.000000000000000001 ETH.

Gwei: A Practical Denomination for Gas

Gwei is short for gigawei. One gwei is equal to one billionth of ether (10e-9 ETH), or 1,000,000,000 wei. Why has gwei become so popular?

The simple answer is: gas. This is the pricing mechanism that the Ethereum network uses to calculate transaction fees and execute smart contracts. When you send a token or interact with a DeFi protocol, you pay a fee in gwei, not in whole ether. This makes the numbers much easier to perceive.

Analogy with the Real World

Imagine dollar bills and cents. If you need to buy something for 50 cents, you would say “50 cents” instead of “0.5 dollars”. Similarly, in Ethereum, it is more appropriate to refer to prices in gwei for small amounts than to express fractions of ether.

Here’s why:

• ETH is like a dollar bill
• Gwei is like a cent
• Wei is the smallest possible unit of currency.

Alternative names for Gwei

Although the term gwei is the most common, there are other designations for one billionth of an ether. They are called Shannon, NanoEther, or simply Nano. The term Shannon is a tribute to the mathematician and cryptographer Claude Shannon, who is considered the father of information theory.

When you see abbreviations on the blockchain, remember: no matter what the denomination is called, they are all just different ways to represent the same currency Ethereum, from the smallest fraction (wei) to a whole ether.