On 22 May 2010, Laszlo Hanyecz paid 10,000 bitcoins for a couple of pizzas. His wallet had to gather 131 separate pieces of bitcoin to cover the amount, and the payment carried a fee of 0.99 BTC. On 16 October 2026 at 08:47 UTC, a Bitcoin payment aiming for the next block needed a fee rate of about 1.1 satoshis per virtual byte. Both numbers make sense once you see how crypto transactions work, step by step, from the moment you press Send to the moment the payment can no longer be undone.
This lesson follows our guide to altcoins and how they differ from Bitcoin, and it skips the ledger-and-keys basics already covered in what cryptocurrency is. One payment on Bitcoin, one on Ethereum, a short stop on Solana. Live figures carry their date and hour in UTC; they change by the minute, so check an explorer before relying on them.
How do crypto transactions work? Six steps from Send to final
Every public blockchain handles a payment in roughly the same order. The details differ, the skeleton does not:
- Your wallet builds a message that says what you spend, who receives it and what fee you offer.
- The wallet signs that message with your private key, which proves the coins are yours without revealing the key.
- It broadcasts the signed transaction to a few computers on the network (nodes). Each one checks it and passes it on.
- The transaction waits in a smart contract holding reserves of two or more tokens, supplied by users, that a decentralized exchange uses to execute trades automatically at a price set by a formula.">pool of unconfirmed transactions, the mempool. Higher fees get picked first.
- A miner (Bitcoin) or a validator (Ethereum, Solana) puts it into a block, and the rest of the network checks that block.
- More blocks are added on top. Each one makes the payment harder to reverse, until it is final in practice (Bitcoin) or formally finalized (Ethereum).
Section 5 of the Bitcoin whitepaper set out the network side of this sequence, steps 3 to 6, in 2008. If blocks are still a fuzzy idea, read our guide to how a blockchain works first.
Step 1: your wallet builds and signs the transaction
Bitcoin spends whole outputs (UTXOs) and sends back the change
Bitcoin has no account balance. Your wallet holds separate outputs from earlier payments, each locked to one of your keys: Unspent Transaction Outputs, or UTXOs, in the words of the Bitcoin developer guide. Each input of a new transaction points to one of them by its transaction ID (txid) and an index number.
An output is spent whole. To pay 10 BTC from a single 50 BTC output, the wallet spends all 50 and creates two new outputs: 10 BTC for the recipient and 40 BTC back to an address you control, the change. Section 9 of the whitepaper describes exactly this pattern, and the first payment between two people, in block 170, follows it (more below).
Whatever no output claims goes to the miner. Bitcoin has no fee field: the fee is the inputs minus the outputs, so a wallet that forgot the change would hand the surplus to a miner.
“We define an electronic coin as a chain of digital signatures.” Satoshi Nakamoto, Bitcoin whitepaper, 2008
Each owner signs the coin over to the next, and anyone can follow the chain back. Our guide to Bitcoin covers the history and supply rules.
Ethereum debits an account and counts with a nonce
Ethereum keeps a list of accounts with balances. ethereum.org defines transactions as cryptographically signed instructions from accounts. Besides the recipient and the amount (counted in wei, the smallest unit of ETH), a payment carries a gas limit, the fee caps explained in step 3, optional data for smart contracts, and a nonce.
The nonce is a counter: 0 for an account’s first transaction, then 1, 2 and so on. Nodes process an account’s transactions in that order and reject a nonce already used, so a signed payment cannot be replayed. The same counter is how you replace a stuck transaction later.
There is no change on Ethereum: the network subtracts the amount and the fee from your balance and adds the amount to the recipient. For more on the account model, see our guide to Ethereum.
The signature proves you hold the key, without showing it
Signing happens with the private key behind the address you are spending from. Nodes can check the signature against the matching public key, and they learn nothing that would let them sign in your place. Change a single digit of the amount after signing and the signature no longer matches.
Bitcoin used the older ECDSA signature scheme from the start. The Taproot upgrade, activated at block 709,632 on 14 November 2021, added Schnorr signatures, which make transactions that need several signers simpler to build.
Custody matters here. Whoever holds the key signs: a wallet you control (self-custody) signs on your device, an exchange signs with its own keys. Our guide to crypto wallets explains the difference, and our page on keeping a seed phrase safe covers the backup behind those keys.
Step 2: broadcast, checks and the mempool
Once signed, the transaction leaves your wallet for one or more nodes, often run by the wallet provider. Each node checks it before passing it on. Is the signature valid? Do the inputs exist, and are they still unspent? Does the Ethereum account hold enough ETH for the amount plus the maximum fee? A transaction that fails here dies quietly and never reaches a block.
A valid one spreads from node to node and lands in each node’s mempool, the waiting room for unconfirmed transactions. That is the “pending” or “unconfirmed” status your wallet shows. Nothing is settled: the coins have not moved on the ledger, and on Bitcoin the sender can still replace the transaction.
The waiting room can be crowded. On 16 October 2026 at 08:47 UTC, Blockstream’s Esplora API counted 81,153 unconfirmed Bitcoin transactions, about 39.5 million virtual bytes in total, offering a combined 9,981,015 satoshis in fees (about 0.0998 BTC). Miners pick the best-paying transactions from that pile first, and the rest wait for the next block, or the one after.
Ethereum works the same way, with one exception. ethereum.org notes that some users skip the public mempool and forward transactions straight to specialised block builders, so not every transaction is visible before it lands in a block.
Step 3: the fee decides your place in the queue
Bitcoin fees depend on size, not on the amount sent
Block space on Bitcoin is scarce, so the fee pays for the space your transaction takes. The developer guide says it plainly: transactions pay fees based on their byte size, and miners rank them by fee per byte. Sending 0.001 BTC or 1,000 BTC costs the same if both transactions have the same size.
Since the SegWit upgrade, size is counted in virtual bytes (vB), defined in BIP 141, a unit in which signature data weighs a quarter as much as the rest. Fee rates are quoted in satoshis per virtual byte, sat/vB. One bitcoin is 100 million satoshis.
Size grows with the number of inputs. A wallet that holds many separate outputs, from years of deposits for example, has to include every one it needs, and each extra input adds bytes. The pizza payment is the extreme case: 131 inputs, 23,620 bytes. A one-input payment of the same amount would take a small fraction of that space.
Rates under 1 sat/vB, like those in the table below, exist because Bitcoin Core 29.1, released on 4 September 2025, cut the default minimum relay fee to 100 satoshis per thousand virtual bytes, or 0.1 sat/vB. The release notes warned that such cheap transactions may not travel or confirm unless enough nodes adopt the new default.
Ethereum fees: a burned base fee plus a tip, since EIP-1559
Ethereum charges in gas, the unit that measures the computing work a transaction needs. A plain ETH transfer needs 21,000 gas. A token transfer or a swap uses more, because it runs contract code. Since the London upgrade of 5 August 2021 (block 12,965,000), which brought EIP-1559, the price per unit of gas has two parts, as ethereum.org explains in its gas documentation:
- The base fee, set by the protocol from how full the previous block was. Blocks aim to be half full; when they are fuller, the base fee rises, by 12.5% per block at most, and when they are emptier it falls. The base fee is burned: that ETH disappears from the supply.
- The priority fee, or tip, which goes to the validator who includes your transaction.
The wallet sets a maximum fee per gas and a maximum tip. You pay gas used × (base fee + tip), and the difference between your cap and what was charged is refunded. One catch: a transaction that fails still pays for the gas it burned through, because the network did the work.
Prices are quoted in gwei, a billionth of an ETH. At 0.06 gwei, a 21,000-gas transfer costs 1,260 gwei, or 0.00000126 ETH, by simple multiplication. Our glossary entry on gas fees has more examples, and layer-2 networks exist mostly to cut this cost further.
Fees on 16 October 2026, with their hour
Snapshots taken on the morning of 16 October 2026. They move from block to block and can be many times higher on a busy day: read them as an example, not a price list.
| Network | Figure | Value | Time (UTC) | Source |
|---|---|---|---|---|
| Bitcoin | Fee rate for the next 1 to 3 blocks | 1.11 sat/vB | 08:47 | Blockstream Esplora |
| Bitcoin | Fee rate for 4 to 6 blocks | 0.302 sat/vB | 08:47 | Blockstream Esplora |
| Bitcoin | Fee rate within about a day (144 blocks) | 0.214 sat/vB | 08:47 | Blockstream Esplora |
| Bitcoin | Fee rate within about a week (1,008 blocks) | 0.1 sat/vB | 08:47 | Blockstream Esplora |
| Bitcoin | Unconfirmed transactions in the mempool | 81,153 | 08:47 | Blockstream Esplora |
| Ethereum | Base fee (standard) | 0.059 gwei | 08:48 | Etherscan Gas Tracker |
| Ethereum | Fast price (tip 0.001 gwei) | 0.06 gwei | 08:48 | Etherscan Gas Tracker |
| Ethereum | Plain ETH transfer, 21,000 gas at 0.06 gwei | 0.00000126 ETH | derived | ethereum.org, Etherscan |
| Solana | Base fee per signature | 5,000 lamports (0.000005 SOL) | protocol rule | solana.com docs |
The Bitcoin rows show the fee market at work: about five times the slow rate bought a place in the next few blocks, while the minimum meant waiting for a quiet moment, possibly days.
Step 4: a miner or validator writes it into a block
Bitcoin: one block about every 10 minutes, on average
Bitcoin miners compete to find a valid proof of work for a block of transactions they have chosen. The winner broadcasts the block, other nodes check every transaction in it, and if all is valid they start building the next block on top of it. Your transaction now has one confirmation.
The average gap is 10 minutes; single gaps are anything but regular. On the morning of 16 October 2026, block 971,682 arrived at 07:03:29 UTC and block 971,687 at 08:15:39 UTC, with gaps in between of 8½ to 29½ minutes. The Bitcoin Wiki puts the odds at about 63% that a block arrives within 10 minutes, 95% within 30 and 99.7% within an hour. In the 24 hours to 08:45 UTC, Blockstream’s Esplora data shows 147 blocks, three more than a perfect 10-minute pace would give.
Block 971,682 held 7,037 transactions and block 971,687 only 3,724. Blocks are capped by weight, not by a number of transactions, so a block full of large transactions holds fewer of them.
Ethereum: one proposer for each 12-second slot
Since the Merge of 15 September 2022 (block 15,537,394), Ethereum has run on proof of stake. Time is cut into 12-second slots, grouped in epochs of 32. In each slot one validator, picked at random, proposes a block built from mempool transactions or supplied by a builder. Other validators re-run the transactions and vote for the block, which Ethereum calls attesting.
An Ethereum transaction with a reasonable tip often lands within a slot or two, seconds rather than minutes. Being in a block is not the same as being final, though.
Step 5: confirmations and finality, or how long a transaction takes
Each block added after yours is one more confirmation. Undoing your payment would mean rebuilding the chain from your block onward faster than everyone else extends it, and each extra block makes that harder.
Why six Bitcoin confirmations became the habit
Section 11 of the whitepaper calculates the chance that an attacker with a share of the mining power catches up with the honest chain. With 10% of the mining power, the chance of rewriting a payment buried 5 blocks deep is 0.09%, the first value in the table under 0.1%. At 6 blocks it is 0.02%. The common habit of waiting for six confirmations, about an hour on average, sits just past that line.
The paper also shows the limits. An attacker with 30% of the mining power still has a 17.7% chance at 5 blocks, and the whitepaper’s own summary puts the depth needed to get under 0.1% at 24 blocks.
“There is nothing special about the default, often-cited figure of 6 blocks.” Bitcoin Wiki, Confirmation
The wiki calls both assumptions behind it arbitrary: an attacker unlikely to hold more than 10% of the hash rate, and a risk under 0.1% judged acceptable. Six blocks are plenty against a casual attacker and too few against one with large resources. For low-value goods, zero confirmations may still do.
Ethereum finality: justified, then finalized
Ethereum adds a formal step on top of confirmations. Only blocks at epoch boundaries, called checkpoints, can be justified and finalized. A checkpoint is justified when validators holding two-thirds of all staked ether vote for it; once the next checkpoint is justified on top of it, it becomes finalized. ethereum.org says a finalized block cannot be reverted unless an attacker destroys millions of ether.
Our arithmetic gives the timing: 2 epochs × 32 slots × 12 seconds = 768 seconds, so finality normally arrives after about 12.8 minutes. Wallets often show a payment as done after one block or a few, which is fine for small amounts. Exchanges set their own deposit thresholds.
Solana in brief: tiny fees, fast slots, expiring transactions
Solana follows the same skeleton with different numbers. The base fee is 5,000 lamports per signature, where one lamport is a billionth of a SOL, so 0.000005 SOL for a simple payment. Half of that base fee is burned and half goes to the validator. An optional priority fee, priced in micro-lamports per unit of compute, goes entirely to the validator.
A Solana transaction is all-or-nothing: if one of its instructions fails, all of them are undone. It can be at most 1,232 bytes, and it carries a recent blockhash that stays valid for 150 slots. A transaction that is not processed in that window simply expires, instead of waiting in a mempool for days as a Bitcoin payment can.
Slots got shorter this year. The Solana Foundation’s upgrade page shows slot times cut from 400 to 200 milliseconds in four steps between 21 August and 9 October 2026, the last at about 14:35 UTC that day. Wallets such as Phantom fill in the fee and the recent blockhash for you.
How to track a transaction on a block explorer, step by step
A block explorer is a website that reads the blockchain and shows it in a readable form. Anyone can use one, without an account. The main ones for the chains in this guide are mempool.space or blockstream.info for Bitcoin, Etherscan for Ethereum and Solscan for Solana.
Find the transaction hash (TXID) first
Every transaction has an identifier, a long string of letters and numbers called the transaction hash, txid or TXID. Etherscan describes it as a reference number for the parties involved. Your wallet shows it in the transaction details, often behind a “View on explorer” link, and exchanges list it in the withdrawal history once the withdrawal has been sent on-chain.
With the hash in hand, the walkthrough is the same on every explorer:
- Copy the transaction hash from your wallet or from the exchange’s withdrawal history.
- Open an explorer for the right network. An Ethereum hash finds nothing on a Bitcoin explorer, and a USDT transfer on Tron will not show on Etherscan.
- Paste the hash into the search bar.
- Read the status. “Unconfirmed” or “Pending” means it is still in the mempool; “Confirmed” or “Success” comes with a block number. “Failed” on Ethereum means the transaction was included but reverted, and the fee was still paid.
- Count the confirmations and compare them with what the receiving platform requires.
- Check sender, recipient and amount (inputs and outputs on Bitcoin, From and To on Ethereum), then the fee. For a token, read the token transfer line, not the ETH value, which is often 0.
Try it on the two Bitcoin transactions below. Their hashes work on any Bitcoin explorer.
Reading the first payment between two people: block 170
Transaction f4184fc596403b9d638783cf57adfe4c75c605f6356fbc91338530e9831e9e16 sits in block 170, timestamped 12 January 2009 at 03:30:25 UTC. Guinness World Records lists it as the first Bitcoin transaction, from Satoshi Nakamoto to Hal Finney.
One input, output 0 of an earlier transaction: a 50 BTC block reward Satoshi had mined. Two outputs: 10 BTC to Finney and 40 BTC of change back to Satoshi. Inputs equal outputs, so the fee was zero, which the network accepted then.
One detail will look odd on the explorer: no addresses. Both outputs pay directly to a public key, an early format called pay-to-public-key, so the explorer shows a long key instead of the address format you are used to.
Reading the pizza payment: 131 inputs, one output
Transaction a1075db55d416d3ca199f55b6084e2115b9345e16c5cf302fc80e9d5fbf5d48d was mined in block 57,043 on 22 May 2010 at 18:16:31 UTC. The explorer shows 131 inputs on the left and a single 10,000 BTC output on the right. There is no change output: the inputs added up to 10,000.99 BTC, and the 0.99 BTC left over went to the miner as the fee.
The size line tells the rest of the story: 23,620 bytes and 94,480 weight units, because each of the 131 inputs is an earlier payment Hanyecz had received. In the Bitcointalk thread where he had made his offer on 18 May, he wrote on 22 May 2010:
“I just want to report that I successfully traded 10,000 bitcoins for pizza.” laszlo, Bitcointalk, 22 May 2010
Reading an Ethereum transaction on Etherscan, field by field
An ordinary transaction from this morning shows how much more an Ethereum page holds. At 08:52:11 UTC on 16 October 2026, an exchange’s wallet sent 50 USDT in block 26,204,017. When we opened Etherscan’s page about a minute later, it read:
- Status: Success, with 2 confirmations. The status comes from the transaction receipt, which exists only once the transaction is in a block.
- From: the exchange’s hot wallet. To: the Tether USDT contract, the program that keeps USDT balances. The person receiving the 50 USDT appears only in the token transfer line, and the input data shows the standard call
transfer(address _to, uint256 _value). - Value: 0 ETH, because USDT is a stablecoin token run by a contract, not ETH itself (our guide to coins and tokens explains the difference).
- Fee: 0.000003018321376021 ETH for 46,109 gas, out of a 46,491 limit. A token transfer runs contract code, so it needs more than the 21,000 gas of a plain ETH payment.
- Burnt: 0.000002997576844703 ETH, more than 99% of the fee. The base fee was 0.065010667 gwei and the maximum tip only 0.000449902 gwei.
- Nonce: 30,986. This wallet had already sent that many transactions.
Stuck transactions: RBF, CPFP and nonce replacement
A transaction stays pending when its fee is too low for the current queue. Nothing is lost while it waits, but nothing arrives either. Each chain has its own fix.
On Bitcoin, Replace-by-Fee (RBF) lets the sender broadcast a new version that spends at least one of the same inputs and pays a higher fee. Under BIP 125, supported since Bitcoin Core 0.12.0, the original had to signal that it was replaceable. Bitcoin Core 28.0, released on 2 October 2024, made its nodes accept replacements by default even without the signal (full RBF), and a later change removed the setting altogether. An unconfirmed Bitcoin payment can therefore still be swapped by its sender: that is the risk of accepting zero confirmations.
Child-Pays-for-Parent (CPFP) works from the other side. The recipient, or the sender through the change output, spends an output of the stuck transaction in a new one with a high fee. A miner who wants that fee has to include both. It is the tool to use when the sender will not bump the fee.
On Ethereum, you replace a pending transaction with another one on the same nonce and a higher fee. MetaMask‘s “Speed up” resends the same payment; a cancellation sends a transaction, which can carry 0 ETH, to your own address on that nonce. For a manual replacement, MetaMask’s help pages ask for a priority fee at least 10% higher and a max fee at least 30% higher, and a cancellation can only be attempted while the original is pending. Nonces run in order, so a stuck nonce 9 holds up nonce 10 too.
For a stuck payment, work through it in this order:
- Look up the hash and check it is still unconfirmed, not failed or dropped. Compare its fee rate or tip with current estimates.
- If you can wait, wait: many low-fee transactions go through once the queue thins out.
- If not, use the wallet’s speed-up or bump-fee button. The recipient of a stuck Bitcoin payment can try CPFP instead.
- On Solana, check whether the transaction expired, then send it again with a fresh blockhash.
Confirmed transactions cannot be reversed
No bank sits between sender and receiver, so there is no one to call for a chargeback. The US Federal Trade Commission puts it in one sentence:
“Cryptocurrency payments typically are not reversible.” US Federal Trade Commission
A mistyped address that happens to be valid sends the coins to whoever controls it, or to nobody. The other classic mistake is the wrong network: USDT sent on one chain to an exchange address that only watches another. Binance Academy states that if you deposit through an incorrect network, Binance is not able to retrieve those tokens. If the coins landed at an address whose seed phrase you hold, importing it into a wallet that supports both networks usually brings them back.
Scams depend on that finality: once the victim has paid, nobody can pull the money back. Our guide to avoiding crypto scams lists the usual tricks. The cheapest protection is a small test transfer before a large one, and a slow, character-by-character check of the address.
Exchange withdrawals: internal ledger first, blockchain second
Coins on a centralized exchange are an entry in that company’s database. Buying, selling or trading there changes its books, not the blockchain. Some platforms, Coinbase among them, also let customers send crypto to each other by email or username, an internal move with no network fee and no trace on-chain.
A withdrawal to an outside address is a real transaction, built and signed from one of the exchange’s hot wallets, like the one with nonce 30,986 in the Etherscan example. That is when you get a hash to track. If the hash takes a while to appear, the wait is on the exchange’s side, not the network’s.
Deposits run the other way: the exchange waits for its own number of confirmations before crediting you. Kraken credits Bitcoin deposits after 3 confirmations and estimates about 45 minutes, assuming 15 minutes per block. Other platforms publish their own thresholds per coin; our guides on buying crypto and choosing an exchange show where to find them.
Transactions are public, not anonymous
“All Bitcoin transactions are public, traceable, and permanently stored in the Bitcoin network.” bitcoin.org, Protect your privacy
Anyone with an explorer can see every amount and every address, forever. What stays hidden is the name behind an address; the whitepaper puts privacy down to keeping public keys anonymous. Researchers therefore call Bitcoin pseudonymous rather than anonymous.
Pseudonyms leak. Analytics firms commonly assume that all the inputs of one transaction belong to the same owner, the so-called multi-input heuristic, and group addresses accordingly. By that logic, the 131 inputs of the pizza payment are one person’s coins. Once one address in such a group touches an exchange account opened with ID (KYC), the whole group can be tied to a name. bitcoin.org advises using a new address for each payment you receive.
Rules for US and UK readers, and the EU travel rule
US readers first: for the IRS, digital assets are property, not currency, and selling them means recognising a capital gain or loss. Moving them from one wallet or account you own or control to another is not a sale. The IRS digital assets page lets you answer “No” to the digital asset question on your return for such a transfer, unless you paid the transaction fee in crypto: the IRS counts that fee as a digital asset transaction. Keep the hashes, since they prove the coins stayed yours.
In the UK, the travel rule has applied since 1 September 2023. From that date, the Financial Conduct Authority says, UK cryptoasset businesses must “collect, verify and share information about cryptoasset transfers”. The obligation comes from amendments to the Money Laundering Regulations that HM Treasury published in July 2022. Where the receiving firm sits in a country without the rule, the FCA still expects the UK firm to collect and verify the information and store it before making the transfer.
In the European Union, the Transfer of Funds Regulation, Regulation (EU) 2023/1113, has applied since 30 December 2024. Every crypto transfer handled by a provider must carry the sender’s details, whatever the amount. For more than €1,000 sent to a self-hosted address, the sending platform must take adequate measures to assess whether that address belongs to you, so it may ask you to prove the wallet is yours. The rule binds crypto-asset service providers: a payment sent directly between two self-hosted wallets involves none, so it falls outside. Our explainer on the MiCA regulation gives the wider EU framework.
A checklist before you press Send
- Match the network: the receiving address and the platform must expect the same chain.
- Compare the address with the original, beginning, middle and end, never from memory or an old chat.
- For a large amount, send a small test first and wait for it to arrive.
- Pick the fee by urgency, after looking at a live estimate, not at yesterday’s figure.
- Sending a token? Make sure the wallet also holds the chain’s coin to pay the fee.
- Save the transaction hash once it appears.
- Wait for the confirmations the receiver needs before you treat the payment as settled.
- Keep your records for tax, including transfers between your own wallets.
The next lesson covers crypto addresses: how a wallet derives one from a public key, and why Bitcoin and Ethereum addresses look nothing alike.
