Understanding Transactions and the Ethereum Transaction Process

Transactions are an essential part of the Ethereum blockchain, and they are used to execute smart contracts and transfer value between accounts. In this article, we will cover the basics of transactions and the Ethereum Virtual Machine (EVM), and we will look at some examples of how transactions are used on the Ethereum blockchain.

What is a Transaction?

A transaction is a message that is sent from one account to another on the Ethereum blockchain. Transactions are used to execute smart contracts, transfer value between accounts, and update the state of the Ethereum blockchain.

Every transaction on the Ethereum blockchain is signed with the private key of the sender, and it includes the following information:

• The sender’s address
• The recipient’s address
• The amount of Ether (ETH) to be transferred
• The gas limit
• The gas price

The gas limit specifies the maximum amount of gas that can be used to execute the transaction, and the gas price specifies the price that the sender is willing to pay for each unit of gas. The total cost of a transaction is calculated as the gas limit multiplied by the gas price.

The Ethereum Virtual Machine (EVM)

The Ethereum Virtual Machine (EVM) is the runtime environment for smart contracts on the Ethereum blockchain. It is a decentralized, Turing-complete virtual machine that can execute arbitrary code, and it is responsible for executing transactions and smart contracts on the Ethereum blockchain.

The EVM is designed to be isolated from the network and the operating system, and it executes code in a deterministic manner, which means that the same code will always produce the same result when executed on the EVM. This makes it possible to verify the correctness of smart contracts and transactions on the Ethereum blockchain.

Executing Transactions

Executing transactions on the Ethereum blockchain requires gas, which is a unit of measure for the computational work required to execute a transaction or smart contract. Gas is used to prevent spam and denial of service attacks on the Ethereum network, and it is paid for in Ether (ETH).

To execute a transaction on the Ethereum blockchain, you will need to specify the following parameters:

• The recipient’s address
• The amount of Ether (ETH) to be transferred
• The gas limit
• The gas price

Here is an example of how to execute a transaction on the Ethereum blockchain with Web3.js:

const Web3 = require('web3');

const web3 = new Web3('https://mainnet.infura.io/v3/YOUR-API-KEY');

web3.eth.sendTransaction({
  from: 'YOUR-ACCOUNT-ADDRESS',
  to: 'RECIPIENT-ADDRESS',
  value: '100000000000000000',
  gas: 21000,
  gasPrice: '30000000000'
}, (error, transactionHash) => {
  console.log(transactionHash);
}).on('error', (error) => {
  console.error(error);
});

This code sends a transaction from YOUR-ACCOUNT-ADDRESS to RECIPIENT-ADDRESS with 1 ETH as the value. The gas and gasPrice parameters specify the gas limit and gas price that will be used to execute the transaction.

If the transaction is successful, the transaction hash will be output to the console. You can use the transaction hash to track the status of the transaction on the Ethereum blockchain.

Executing Smart Contracts

Smart contracts are self-executing contracts with the terms of the agreement between buyer and seller being directly written into lines of code. They are used to facilitate, verify, and enforce the negotiation or performance of a contract, and they are executed on the Ethereum Virtual Machine (EVM).

To execute a smart contract on the Ethereum blockchain, you will need to do the following:

1. Compile your smart contract with a Solidity compiler, such as Remix (https://remix.ethereum.org).
2. Deploy your smart contract to the Ethereum blockchain with a Web3 provider, such as Infura (https://infura.io).
3. Interact with your smart contract using the Web3.js API.

Here is an example of how to execute a smart contract on the Ethereum blockchain with Web3.js:

const Web3 = require('web3');

const web3 = new Web3('https://mainnet.infura.io/v3/YOUR-API-KEY');

const contract = new web3.eth.Contract(ABI, CONTRACT_ADDRESS);

contract.methods.functionName(functionArguments).send({
  from: 'YOUR-ACCOUNT-ADDRESS',
  gas: 1500000,
  gasPrice: '30000000000000'
}, (error, transactionHash) => {
  console.log(transactionHash);
}).on('error', (error) => {
  console.error(error);
}).then((result) => {
  console.log(result);
});

This code calls the functionName() function of the contract smart contract, with the specified functionArguments. The from parameter specifies the address of the account that will be used to send the transaction, and the gas and gasPrice parameters specify the amount of gas and the gas price that will be used to execute the transaction.

If the transaction is successful, the transaction hash and the result of the function will be output to the console. You can use the transaction hash to track the status of the transaction on the Ethereum blockchain, and you can use the result to update the state of your application.

Conclusion

Understanding transactions and the Ethereum Virtual Machine (EVM) is essential for any blockchain developer working with the Ethereum blockchain. By following the steps outlined in this article, you can easily execute transactions and smart contracts on the Ethereum blockchain and build decentralized applications (DApps) that are fast, secure, and transparent. With a little bit of practice and the right tools, you will be well on your way to becoming a proficient blockchain developer.

Exercises

To review these concepts, we will go through a series of exercises designed to test your understanding and apply what you have learned.