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Gas is the internal pricing for running a transaction or contract in Ethereum, a measure of computational effort. The term Gas is simply the Ether cost you have to pay to get your Ethereum message or transaction executed as soon as possible. With Ethereum, there is a blocksize limit too – so you’re paying for premium space in the next block.
Since computation is expensive (mind that it has to be done by every full node in the network), excessive consumption of gas needs to be discouraged. Therefore, each unit of gas must be paid for (in Ether) by the sender of the transaction that triggered the computation.
Gas limit
Unfortunately, it is often not easy and in general even impossible to know in advance how much gas a transaction will need eventually. Therefore, transactions have a gas limit field to specify the maximum amount of gas the sender is willing to buy. If the gas used exceeds this limit during execution, processing is stopped.
See also
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