Note: This blog post is meant for beginners. If you have experience with web3 and blockchain, you might not find this as useful, but I encourage you to maybe stick around anyway.

In the last blog we have discussed about Making Our First Transaction on blockchain but when you initiate a transaction on a blockchain like Ethereum, a lot happens behind the scenes, and everything is traceable through a unique identifier known as the transaction hash or <strong>TxHash</strong>. This identifier is important because it helps us track the status and details of your transaction on platforms like Etherscan.

Let’s break down the steps involved in a typical transaction similar to the one we made in the last blogpost:

1. Initiation

This is what happen when we create a transaction to send some Ethereum (ETH). This involves specifying the recipient’s address and the amount you want to send.

2. Sign Transaction

Before sending it out into the network, we sign the transaction with our private key. In our case MetaMask handled the signing of transactions securely on behalf of us. When we initiate a transaction, MetaMask prompts us to approve it. Upon approval, MetaMask uses the private key stored locally within our browser to sign the transaction.

3. Broadcast Transaction

Next, our signed transaction is broadcast to the Ethereum network. This lets the network know that you want to transfer some ETH to another address.

4. Verification

Once our transaction is out there, nodes in the Ethereum network begin verifying it. They check things like:

• Valid Signature: Confirming the transaction signature matches the sending address.
• Sufficient Balance: Ensuring you have enough ETH to cover the transaction.
• Nonce Verification: Checking the nonce (a counter of transactions from your address) to prevent double spending (we will discuss this later in later blogs).

5. Mining

Our transaction isn’t added to the blockchain right away. First, it enters a mining pool, where it waits to be picked up by miners. This process involves:

• Transaction Pool: Our transaction waits here until a miner picks it up.
• Choose Transactions: Miners select transactions based on the fee, higher fees often get priority.
• Solve Puzzle: Miners compete to solve a cryptographic puzzle, the first to solve it wins the right to add a block to the blockchain (This is now changed with Proof-of-Stake, which we will discuss in the upcoming blogs)

6. Confirmation

• The miner who solves the puzzle adds our transaction to a new block.
• This new block, containing our transaction, is then broadcast to the entire network.
• More blocks added on top of our increase the number of confirmations, securing our transaction further in the blockchain.

7. Receipt

Once our transaction is confirmed, the network updates the recipient’s balance with the transferred ETH. We’ll receive a transaction receipt, which serves as proof of the completed transfer.

8. Network Sync

Finally, all nodes update their copy of the blockchain ledger with the new transaction information. This ensures everyone has the latest, accurate state of the network.

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We can check our transaction on Sepolia Etherscan this is mine from the last blog. Just enter your wallet address and click on the most recent transactions. You will see a lot of fields there, we will discuss them one by one.

• Transaction Hash: This is the unique ID for our transaction and no two transactions share the same hash.

• Status: Tells us straight up if your transaction was succeed or failed.

• Block: Shows the number of the block that our transaction was included in.

• Timestamp: This is when our transaction was recorded on the blockchain.

• From: The is going to be our wallet address

• To: The receiving address of the ETH.

• Value: The amount of ETH transferred in the transaction.

• Transaction Fee: The total ETH paid as a fee, rewarding miners for processing your transaction.

• Gas Limit: The maximum amount of gas we were willing to use for the transaction.

• Gas Used by Transaction: This shows how much of the gas limit was actually used (We will discuss about gas in detail in the upcoming blog)

• Gas Price: Indicates how much ETH we paid for each unit of gas, measured in Gwei.

• Nonce: A sequential number tied to every transaction made from your address, preventing double-spending.

• Input Data: Any extra data sent with the transaction, often used when calling smart contracts.

• Logs: Details about events triggered during the transaction, useful in smart contract interactions.

By understanding these steps, we gain insight into what happens from the moment we send a transaction to when it’s confirmed on the blockchain. Next we will discuss how blockchain really works.