Gas Limit is the maximum amount of "gas" a user is willing to spend on a single transaction or a smart-contract operation on the Ethereum blockchain.

The Gas Tank Analogy

To understand the Gas Limit, imagine you're taking a road trip. The "gas" is the fuel you need to travel, and the "gas limit" is the maximum amount of fuel you are willing to put in your car's gas tank for a single trip.

Every operation on the Ethereum network—from a simple transaction to a complex DApp function—requires a certain amount of computational work. This work is measured in units of gas. The Gas Limit is a crucial safety mechanism: if you set it too low, your transaction will fail because it runs out of "fuel" before it can be completed. However, if you set it too high, you might risk paying more than a transaction actually costs if a bug in a smart-contract tries to consume an infinite amount of gas.

Why It's a Key Component

The Gas Limit works hand-in-hand with the gas price to determine the total cost of a transaction. The total fee is calculated as: Gas Used x Gas Price. The Gas Limit sets the upper bound for the "Gas Used" part of the equation. This mechanism prevents malicious actors from spamming the network with infinite loops and ensures that network resources are used efficiently. It is a fundamental part of the Ethereum EVM.