Like other Proof of Work (POW) blockchain networks, Ethereum also relies on miners to verify transactions, manage network, issue new Ethereum tokens and secure the network.
Ethereum uses Ethhash algorithm as the basis of all network activity. Simply speaking, when a transaction is received on network, miners pick it up and include it in the block, to gain the fees as a reward for processing the transactions. A transaction needs multiple “verifications” or “confirmations” before it can become final and irreversible.
Nature of Ethereum Transactions
An Ethereum transaction includes the address of the receiver, the amount to be transferred, the fees that the sender is willing to pay known as “gas” and the private key authorization to verify the said transaction.
Like Bitcoin (BTC), Ethereum miners also pick up the transactions with the highest fees, meaning that a large amount of gas included in a transaction will make certain that miners will include the transaction on priority to the blockchain and it will get approved faster. Likewise, a transaction with lower fees, increases the time required to confirm a transaction.
Ethereum Transaction Verification Process
When a transaction is sent, it is verified first by the local node before being sent to the main network. During high activity times, the “gas” fees might rise significantly and the low fees transactions might require extremely long time to get confirmed by the network. If a transaction isn’t being confirmed for a long period of time, it can be resent with a higher fees.
Once the miners have chosen and validated certain transactions (most commonly prioritized by highest gas fees) and have created a batch, they are ready to be included in the next block. Afterwards, the miners solve complex mathematical calculations to add the block to the overall blockchain. Eventually, they find the solution to the mathematical puzzle and…