Does Ethereum adjust and increase its gas price during times when there is high demand?
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No, the miners can decide which gas price they accept. I have not yet observed that they increase that value during heavy load. However, what you are looking for is probably how ethereum scales regarding the block gas limit. – q9f Jan 16 '17 at 20:09
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Does gas price increase under heavy load?
It can
Does Ethereum adjust and increase its gas price during times when there is high demand?
Sort of.
To prevent infinite loops (potentially spam) from running on the Ethereum Virtual Machine (EVM), the protocol is designed with a gas limit. The gas limit allows only so many computations per block to be executed.
Miners are responsible for confirming the state of each block. In return they are paid the coinbase transaction (currently: newly minted 5 ETH/block) plus all the transaction fees (total cost of all gas per block). Transaction fees are voluntarily paid by Ether-senders/contract-executors (users).
Miners are free to prioritize which transactions get confirmed first based on the fee paid by the sender/executor. Higher fees can receive higher priority. The gas price fluctuates according to what users are willing to pay to get their transactions prioritized.
CBobRobison
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1"currently the price of gas is fixed to 10 Szabo, which is about 1/100,000 of an Ether": This information is out-of-date. – Edmund Edgar Jan 17 '17 at 01:07
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Basically as your answer describes under "When the price of gas is no longer fixed". – Edmund Edgar Jan 17 '17 at 01:38
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Edited accordingly. Please consider upvoting. Thanks for the correction! – CBobRobison Jan 17 '17 at 01:49
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