Ethereum transactions

You could perform Ethereum transactions internally through smart contract calls and externally through crypto accounts with private keys and seed phrases. Internal smart contract calls or node requests apply to validators, blockchain developers, and other relevant technicians. However, Ethereum transactions operated through crypto wallets (externally-owned accounts (EOAs)) are more common.

During a transaction, nodes can broadcast the transaction request to the network to be executed on the Ethereum Virtual Machine (EVM). A validator works on the request and publishes the results to the rest of the network to be added to a new block. During this process, you pay the network a “gas” fee to support validators executing your transactions. Network validators act on your behalf, using the fees paid as an incentive to expedite the transaction.

Before the London Hard Fork in August 2021, the gas fee payment system had challenges, causing Ethereum fees to become outrageous, especially during network congestion. The EIP-1559 protocol was introduced to tackle this challenge by introducing a two-tiered fee system: a compulsory “base fee” and an optional “tip” fee, also called the priority fee. The tip is paid to improve your chances of getting your Ethereum transactions validated faster. Validators would naturally act upon transactions with tips, just as in our daily traditional life. Any gas not consumed during the transaction process is sent back to the senders’ accounts.

Ethereum transactions occur in different forms.

• Regular transactions: Common transactions between two accounts.

• Contract deployment transactions: These transfers compiled smart contract codes without specifying the recipient. I.e, the Ethereum transaction is sent to the address 0.

• Contract execution: This transaction relates to the contract deployment transaction. In this case, a valid address is referenced during the transaction, the smart contract address.

In summary, Ethereum transactions follow this pattern:

Transaction (message call) → EOA → Contract account (EVM Code) → State Changes