Note

If you are new to the blockchain technology, taking our Introduction to Blockchain Technology self-paced course is highly recommended. Also, for a comprehensive coverage of blockchain development in Ethereum or mastering Solidity programming, taking our below self paced courses is highly recommended:

• Learn Solidity Programming by Examples
• Introduction to Ethereum Blockchain Development

Recap

In our previous article (How Ethereum Manages Accounts), we discussed how accounts are created and managed in Ethereum.

In this article, we learn how transactions are processed and managed in Ethereum.

Transactions and messages

Transactions and messages in Ethereum are a little bit confusing, largely because they are often discussed together. There are some subtle differences. The following diagram will give some clarity about the differences and commonalities between these two terms:

 

In Ethereum, the term transaction represents the signed data package of a message that is sent from an EOA to another account. The message itself instructs what action to take on the blockchain. They all require the initiator of the transaction to digitally sign the messages, and transactions will be recorded into the blockchain. Three types of transactions can happen:

• CA creation: In this case, an Externally Owned Account (EOA) - covered in our previous article- acts as the initiator or creator of the new contract account.
• A transaction between two EOAs: In this case, one EOA initiates an ether movement transaction by sending a message to the receiving EOA.
• A transaction between EOA and CA: In this case, the EOA initiates a message call transaction, and the CA will react with the referenced smart contract code execution.

The CA can send messages to other CAs or EOAs. Unlike the transaction, messages are virtual objects during the execution and will not be recorded into the blockchain. If an EOA is the recipient, the recipient's account state will be updated and recorded in the world state. If a CA is the message recipient, they are accepted as function calls and the associated contract code will be executed.
From a data structure perspective, a transaction is a digitally signed message. According to web3.js, a message contains the following attributes. Apart from attribute, all others are optional:

Attribute	Data type	Length	Description
from	DATA	20	This is a required field as the sender's address.
to	DATA	20	This represents the receiver's address.
gas	QUANTITY		This represents the gas value provided for the transaction execution.
GasPrice	QUANTITY		This represents the unit gas price used for each paid gas.
value	QUANTITY		This represents the ether value to be sent with this transaction.
data	DATA		This represents the compiled code of a contract when creating a contract account or the hash of the invoked method signature and encoded parameters during the contract invocation.
nonce	QUANTITY		This represents a nonce. This allows you to overwrite your own pending transactions that use the same nonce.

Transactions will have additional attributes. Ethereum uses an Elliptic Curve Digital Signature Algorithm (ECDSA) signature for digital signatures; r and s are outputs of an ECDSA signature, and v is the recovery ID.

Next Article

In our next article (How Smart Contracts Work in Ethereum), we discuss how blockchain smart contracts work in Ethereum.

This article is written in collaboration with Brian Wu who is a leading author of “Learn Ethereum: Build your own decentralized applications with Ethereum and smart contracts” book. He has written 7 books on blockchain development.

Resources

Free Webinars on Blockchain

Here is the list of our free webinars that are highly recommended:

• Hyperledger Fabric for system admin versus developers
• How to harness blockchain for environmental and corporate sustainability
• Review of Initial Coin Offering, Security Token Offering and asset tokenization use cases and best practices
• Blockchain for entrepreneurship- 27 blockchain business use cases
• Hyperledger Fabric for entrepreneurship- 21 blockchain business use cases

Free Courses

Here is the list of our 10 free self-paced courses that are highly recommended:

• IT Career Roadmap Explained
• Web Design with Bootstrap
• User Experience Best Practices
• Intro to Search Engine Optimization
• Web Design with WordPress
• Introduction to Drupal CMS
• Intro to Joomla CMS
• Intro to Cybersecurity
• Introduction to Cloud Technology
• Recorded Live Webinars and Classes

Self-Paced Blockchain Courses

If you like to learn more about Hyperledger Fabric, Hyperledger Sawtooth, Ethereum or Corda, taking the following self-paced classes is highly recommended:

1. Intro to Blockchain Technology
2. Blockchain Management in Hyperledger for System Admins
3. Hyperledger Fabric for Developers
4. Intro to Blockchain Cybersecurity
5. Learn Solidity Programming by Examples
6. Introduction to Ethereum Blockchain Development
7. Learn Blockchain Dev with Corda R3
8. Intro to Hyperledger Sawtooth for System Admins

Live Blockchain Courses

If you want to master Hyperledger Fabric, Ethereum or Corda, taking the following live classes is highly recommended:

• Live and self-paced blockchain development with Ethereum
• Live and self-paced blockchain development with Hyperledger Fabric
• Live and self-paced blockchain development with Corda
• Immersive Blockchain Bootcamp with live and self-paced courses
• Live crash course for learning Ethereum with Solidity
• Live crash course for building DApps with Hyperledger Fabric 
• Live crash course for building DApps with Corda
• Live full-stack blockchain development in Hyperledger and Ethereum

 

Articles and Tutorials on Blockchain Technology

If you like to learn more about blockchain technology and how it works, reading the following articles is highly recommended:

•  History and Evolution of Blockchain Technology from Bitcoin
•  Overview of Blockchain evolution and phases from Ethereum to Hyperledger
• Comprehensive overview and analysis of blockchain use cases in many industries
• Blockchain Crowdfunding Security Token or Initial Coin Offerings
• A beginner Guide to Blockchain Technology
• How Decentralized Peer-To-Peer Network Works
• How blocks are added to the blockchain
• How Public and Private Keys of Cryptography Work
• What Is A Cryptographic Hash Function
• How Digital Signature Works In Blockchain
• The role and types of consensus mechanism in blockchain
• How Proof-of-Work Consensus Works in Blockchain
• How Proof of Stake Consensus works in Blockchain

Articles and Tutorials on Ethereum and Solidity

If you like to learn more about blockchain development in Ethereum with Solidity, reading the following articles and tutorials is highly recommended:

• Review of Architecture and Components of Ethereum
• Comprehensive Blockchain Ethereum Developer Guide from Beginner to Advance Level
•  How to Write Ethereum Smart Contracts with Solidity in 1 hour
• Review of challenges in distributed systems
• Review of Cap Theorem in Distributed Systems
• Horizontal Scaling versus Vertical Scaling in Distributed Systems
• How to Scale up Ethereum Blockchain Applications
• Review of scaling solutions for Ethereum
• How to Manage Ethereum State Channel with Raiden
• How Plasma Chains Work in Ethereum
• How Sharding and Gasper work in Ethereum
• How Proof-of-Stack Consensus Works in Ethereum
• A roadmap for Implementing Ethereum 2.0
• How to work with Decentralized Data and Content Storage in Ethereum
• How Decentralized Messaging with Whisper Works in Ethereum
• Review of Infura for Ethereum Development
• Review of Infura Ethereum API
• How to Use Remix with Infura for Ethereum Development
• How Ethereum Client API Works
• How Ethereum IPFS Storage Works
• How to Install and Start Ethereum IPFS Storage
• How to Run Ethereum IPFS Storage
• How to Work with Ethereum Swarm Storage
• How to Install Ethereum Swarm Storage
• How to Handle Ethereum Messages with Whisper
• Review of Popular Ethereum Smart Contract Libraries
• Review of Private and Permissioned blockchain
• How to Set up a Local Private Ethereum Blockchain
• How to Run Geth on a Local Private Ethereum Blockchain
• How to Build a Local Private Ethereum Blockchain with Mining
• How to Run Geth on a Local Private Ethereum Blockchain with Mining
• How to Create an Account on a Local Private Ethereum Blockchain
• How to Use Ethereum Optional Flags with New Chains
• Review of Ethereum Options for Development and Testing
• Review of Ethereum Developer Chain Options
• Review of Ethereum API and Console Options
• Review of Ethereum Networking Options
• Review of Ethereum Transaction Pool Options
• Review of Challenges for Ethereum Blockchain Development
• UI/UX and Design Thinking for Ethereum Blockchain Development
• Review of Ethereum Governance for Ethereum Blockchain Development
• Review of Government Regulations for Ethereum Blockchain Development
• Review of Mainstream Adoption for Ethereum Blockchain Development
• Review of Ethereum Tools and Infrastructure
• Review of Ethereum Tools and Frameworks
• Review of 100 DApps that Run on Ethereum Network
• Ethereum and Know-Your-Customer Requirements
• Integration of Ethereum with AI, ML and IoT

Articles and Tutorials on Hyperledger Family

If you like to learn more about blockchain development with Hyperledger, reading the following articles and tutorials is highly recommended:

• Introduction to Hyperledger Architecture, Projects, Tools and Libraries
• Complete Review of Hyperledger Fabric Architecture and Components
• Hyperledger Fabric for System Administers versus Developers
• How to use Prometheus and Grafana to monitor Hyperledger Fabric
• Essential Hyperledger Sawtooth Features for Enterprise Blockchain Developers
• Blockchain Developer Guide- How to Install Hyperledger Fabric on AWS
• Blockchain Developer Guide- How to Install and work with Hyperledger Sawtooth
• Blockchain Developer Guide- How to Install Hyperledger Burrow on AWS
• Blockchain Developer Guide- How to Install Hyperledger Iroha on AWS
• Blockchain Developer Guide- How to Install Hyperledger Indy and Indy CLI on AWS
• Blockchain Developer Guide- How to Install Hyperledger Seth and Docker on AWS
• Blockchain Developer Guide- How to Configure Hyperledger Sawtooth Validator and REST API on AWS
• Blockchain Developer Guide- How to Build Transaction Processor as a Service and Python Egg for Hyperledger Sawtooth
• Blockchain Developer Guide- How to Deploy Ethereum Smart Contracts with Hyperledger Burrow
• Blockchain Developer Guide- How to Create Cryptocurrency Using Hyperledger Iroha CLI
• Blockchain Developer Guide- How to Explore Hyperledger Indy Command Line Interface
• Blockchain Developer Guide- Comprehensive Blockchain Hyperledger Developer Guide from Beginner to Advance Level
• Introduction to Hyperledger Sawtooth Blockchain Development

Articles and Tutorials on R3 Corda

If you like to learn more about blockchain development on Corda , reading the following articles and tutorials is highly recommended:

• Introduction to R3 Corda Blockchain Development

Articles and Tutorials on Other Blockchain Platforms

If you like to learn more about blockchain development in other platforms, reading the following articles and tutorials is highly recommended:

• Introduction to Quorum Blockchain Development