In blockchain transactions, gas limit and gas price are two key components that determine the total cost of executing an operation, but they serve different purposes.

Gas Limit refers to the maximum amount of computational work a user is willing to pay for in a transaction. It acts as a safety measure, preventing runaway smart contracts from consuming excessive fees. For example, a simple ETH transfer may require a gas limit of 21,000 units, while complex smart contracts could need 200,000+. If the gas limit is too low, the transaction fails ("out of gas"), but unused gas is refunded.

Gas Price is the amount of cryptocurrency (e.g., Gwei in Ethereum) a user pays per unit of gas. It determines transaction priority—higher gas prices incentivize miners/validators to process transactions faster. Gas prices fluctuate based on network demand.

Key Differences
Gas Limit
Maximum gas units allocated
Prevents excessive spending
Too low = failed transaction
Gas Price
Cost per gas unit (e.g., 20 Gwei)
Sets transaction speed & priority
Too low = slow/unprocessed transaction

The total fee is calculated as:
Total Fee = Gas Limit × Gas Price

Understanding both helps optimize costs, setting a proper gas limit avoids failures, while adjusting gas price balances speed and affordability.