Transaction

In simple terms

A transaction is an instruction you sign with your private key that tells the network to move something. Once it is confirmed it is written into the shared record permanently, and there is no bank you can call to undo it.

Definition

A signed instruction to move value or run a contract on a blockchain, permanently recorded once included in a block.

In depth

A transaction is a message containing sender, recipient, amount, fee parameters, a sequence number, and a cryptographic signature produced by the sender's private key. Nodes validate the signature against the sender's public key, check that the sequence number and balance are consistent with current state, and reject anything malformed. On account-based chains such as Ethereum a transaction may also carry calldata that invokes a smart contract, in which case execution consumes gas and either succeeds or reverts, with the fee charged either way.

How does Transaction work?

A wallet builds the instruction, signs it with the private key held on the device, and broadcasts it to nearby nodes, which relay it across the network. It waits in the mempool until a miner or validator includes it in a block. Nodes then re-verify it as part of verifying that block. Once included it has one confirmation, and each subsequent block adds another. The signature proves authorisation without ever revealing the key itself.

An example

Someone sends an illustrative 0.05 ETH and attaches a fee. The wallet signs and broadcasts it, and it sits in the mempool for a couple of minutes while higher-fee transactions are included first. It lands in the next block, the recipient sees one confirmation, and after a further handful of blocks most services treat it as settled.

Figures are illustrative only.

What beginners get wrong

• Sending to an address on the wrong network. The same-looking address on a different chain is a different destination, and funds sent there are usually unrecoverable.
• Believing a transaction can be cancelled after it confirms. It cannot, by design, and anyone offering to reverse one for a fee is running a scam.
• Setting a fee far below the current market and then assuming the transaction failed. It is usually still queued and will either confirm much later or be dropped.
• Forgetting that a failed contract call still costs a fee, because the network did the work of attempting it.

Related terms

• Block
• Confirmation
• Wallet Address
• Private Key
• Gas
• Mempool
• Finality

Part of

How does a blockchain transaction actually work? — the subject page for blockchain mechanics, with all 15 of its definitions in one place.