Transaction (TX)

What Is a Transaction (TX)?

A transaction (TX) refers to transferring digital assets or cryptocurrencies on a distributed ledger, such as a blockchain.

Here are some key points to understand about transactions:

  • Transactions are recorded on a distributed ledger, which ensures transparency and immutability.
  • Cryptography is used to encrypt transaction data and secure the ledger.
  • Crypto transactions are decentralized, meaning no central authority oversees or controls them.
  • Peers engage in transactions by using crypto wallets to send and receive funds.
  • The transaction initiator transfers funds from their public address to another account.
  • The sender requires the corresponding private key to authorize and complete a transaction.
  • Transactions are encrypted before being broadcast on the distributed ledger.
  • The transaction amount can be publicly viewed, but the sender’s identity remains anonymous.
  • Multiple transactions can be grouped and added to the blockchain using blocks.
  • Miners or validators are responsible for adding transaction blocks to the blockchain.
  • The time it takes for a transaction to be recorded on the blockchain can vary based on the network and transaction fee.
  • Transactions can be processed instantly or may take a few minutes to confirm.
  • In cases of high network congestion, transactions may experience delays of a few hours.
  • For confirmation and verification, the status of a transaction can be checked using a block explorer specific to the cryptocurrency used.

Understanding transactions is fundamental for engaging in cryptocurrency transfers and interacting with blockchain networks.