Ethereum transactions and Ethereum validation go hand in hand. Without verification, the blockchain can be vulnerable to malicious attacks and fraudulent attacks like double spending, compromising its safety and trustworthiness.
When you initiate a transaction, it is first verified by miners before being confirmed and executed. But how does the validation process work? In this article, we will look at how transactions like converting 2 ETH to USD are validated.
What is Ethereum Validation?
Ethereum validation checks the trustworthiness of transactions to ensure the integrity and security of the network. It verifies the sender’s signature and confirms whether there are enough funds to cover both the transfer and gas fees. On top of that, it also ensures smart contracts are executed correctly.
How Does Ethereum Verify Transactions?
Ethereum relies on validators to verify and confirm transactions. The blockchain uses Proof of Stake (PoS) as its consensus mechanism, where validators are chosen based on the amount of cryptocurrency they hold.
Unlike Bitcoin, which uses the competitive Proof of Work (PoW), Ethereum picks miners randomly based on the amount they are willing to put as collateral. With this system, validators have something to lose, which incentivizes them to act honestly.
Ethereum Transaction Process
Ethereum transactions go through several steps before being confirmed and executed.
Sender Creates a Transaction
First, a sender creates a transaction specifying the amount to be transferred, the recipient’s address, and the gas fees they are willing to pay. In the case of smart contracts, users fill the transaction data field providing all the necessary information needed to execute the contract or perform other complex transactions.
Signing the Transaction
After creating the transaction, the sender signs it with their private key to show proof of ownership and ensure the authenticity of the transaction. The network then generates a digital signature or public key, unique to the combination of the transaction data and the sender’s private key.
Broadcasting the Transaction:
Once the transaction is signed, it is broadcast to the Ethereum network, where it’s distributed through nodes to validators. It joins a pool of other Ethereum transactions waiting to be added to a block and validated.
When you broadcast your message, the network gives it a transaction hash, which you can use to check the status of your transaction on the blockchain. You can do this using any blockchain explorer – just enter the transaction ID into the search bar to pull it up.
Validators pick transactions from mempool and add them to a block. Only a specific number of transactions can be added to a block simultaneously. While Ethereum doesn’t have a fixed size like Bitcoin, it has a target block gas limit. The blockchain accepts up to 21,000 gwei for regular transactions.
This step is crucial and determines how long your transaction will take. That’s because Ethereum allows validators to decide which transactions to process first. Often, transactions with high gas fees are processed much quicker than transactions with low fees.
Verification and Validation
After the transaction has been added to a block, validators use the PoS consensus mechanism to process the block. They check the transaction details to see whether it’s accurate. This helps stop double-spending and other fraudulent transactions and ensures only legitimate transactions are confirmed. Validators also confirm whether the send has enough Ether to complete the transactions.
Confirmation and Execution
If the transaction meets all the necessary criteria, the validators okay it for execution. Once confirmed, you can’t reverse the transaction. It can take anywhere from 15 seconds to five minutes to complete your transaction, depending on network traffic and gas fees.