Block Gas Limit refers to the maximum amount of computational work, measured in gas, that can be included in a single block on certain blockchain networks like Ethereum.

Gas is a unit that determines the amount of computational effort required to execute operations, such as smart contracts or transactions. The Block Gas Limit is critical because it directly impacts how many transactions can be processed in each block, influencing the network’s overall throughput.

When the demand for transaction processing increases, users may compete to have their transactions included by offering higher gas prices, which can lead to congestion and increased transaction fees. Maintaining a suitable Block Gas Limit is essential for balancing scalability and decentralization.

If it’s set too high, it might push the network towards centralization, as only those with greater resources could participate. Conversely, if it’s too low, it may lead to longer wait times for transactions. Thus, adjustments to the Block Gas Limit are made periodically to manage network effectiveness and user experience.