How Ethereum processes a transaction
Ethereum checks your signature, runs EVM code and adds the transaction to a block. Validators order, execute and attest finality. The base fee is burned
Vahe HakobyanEditor-in-chief
Updated Oct 6, 20263 min readFact-checked
On this page
- You need a wallet, ETH for gas, and the recipient's address.
- Your wallet signs and broadcasts; validators order by gas.
- Proof of stake uses validators who lock ETH.
- A confirmed transaction is usually irreversible.
- Keep tax records and protect your seed phrase.
Ethereum is a decentralized blockchain with smart contracts. It processes transactions by validating signatures, running code in the EVM, and forming blocks. This guide follows that path from your wallet to a final block.
Before you send: what you need
Your wallet holds the keys that control your ETH balance; it does not hold the coins themselves. Before you sign, check the items below.
How Ethereum processes your transaction
Ethereum uses proof of stake. Validators lock ETH as a deposit to process transactions, and they can lose some stake if they cheat.
- 1Enter recipient and amountOpen your wallet, add the recipient's address and amount, then press send. Check the address and network first.
- 2Sign and broadcastYour wallet signs the transaction with your private key and broadcasts it to Ethereum nodes. The signature proves control without revealing the key.
- 3Wait in the mempoolThe transaction waits in the mempool, a public queue. Validators select and order transactions by the gas they offer.
- 4Execute and attestA block proposer adds it to the next block, and the EVM runs the code, moves assets, and charges gas. Part of the gas fee goes to validators, while the base fee is burned, and validators later attest to finality.
After the transaction: records and safety
For US taxes, the IRS treats crypto as property. Buying ETH with dollars is not taxable, but trading one crypto for another or paying with crypto can be.
Ethereum price todayLive price, charts and market data live in our Coins section.Frequently asked questions
If it runs out of gas, the EVM reverts the changes, but the gas used is still spent.
A confirmed transaction is generally irreversible. While pending, a replacement with the same nonce and higher gas fee can speed it up.
A nonce is the count of transactions sent from an account. It keeps order and stops replay.
Gas costs track demand for block space. When transactions compete, the gas price rises; when demand falls, it drops.
