Ethereum transaction are cryptographically signed instructions to initiate a transaction to update the state of the Ethereum network.
What Is an Ethereum Transaction?
Ethereum transactions are cryptographically signed instructions from accounts, where an account will initiate a transaction to update the state of the Ethereum network. The simplest transaction is the one that occurs from one ETH account to another.
In the world of cryptocurrencies, an Ethereum transaction is the action that is initiated by an externally-owned account, or in other words, one which is managed by a human, not a contract. If Johnny sends 2 ETH to Jim, Johnny’s account has to be debited and Jim’s has to be credited. When this state changes, the action takes place with a transaction.
Now, based on Ethereum’s rules of consensus, the network agrees the transaction is a valid one, and then it gets included in a block that is added to the blockchain itself.
The message that makes up the transaction is an RLP-encoded array that has the ability to specify the details of the transaction itself and has values such as the recipient, the value, the data, the gas limit, the gas price, the nonce and the signature.
The recipient is the account address to which the transaction is actually sent.
The value is the amount of Ether to transfer from the sender to the recipient, and this can even be zero.
The data is an optional arbitrary binary data, where throughout the contract deployment, the contract’s bytecode is sent.
The gas limit is the maximum amount of gas that can be consumed by a transaction, while the gas price is the amount the sender will pay for each unit of gas. A nonce is a sequence number, which is per sender and has to match the next available sequence number. The signature is data that identifies as well as authenticates the transaction’s sender.