Transfer and Receive Funds on Ethereum: A Step-by-Step Guide

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Understanding how to send and receive transactions is fundamental to interacting with the Ethereum blockchain. Whether you're transferring ETH between personal accounts or preparing for more complex smart contract interactions, every action on Ethereum begins with a transaction. This guide walks you through the full lifecycle of an Ethereum transaction—from initiation to confirmation—using practical commands and real-time blockchain inspection.

Understanding Ethereum Transactions

At its core, a transaction is the only way to interact with the Ethereum network. As covered in earlier discussions on blockchain mechanics, all operations—including simple value transfers or executing smart contracts—are encapsulated within transactions and broadcast to the network.

In this tutorial, we’ll demonstrate how to:

This hands-on approach uses Geth (Go-Ethereum), one of the most widely used Ethereum clients, running on a private test network.

👉 Learn how blockchain transactions work under the hood — explore deeper insights here.

Setting Up Your Geth Node

Before initiating any transaction, ensure your Geth node is active and synchronized. If it's currently stopped, restart it using the following command (replace the etherbase address with your mining reward address):

cd ether-test
geth --datadir ./db/ \
  --rpc \
  --rpcaddr=127.0.0.1 \
  --rpcport 8545 \
  --rpccorsdomain "*" \
  --rpcapi "eth,net,web3,personal,admin,shh,txpool,debug,miner" \
  --nodiscover \
  --maxpeers 30 \
  --networkid 198989 \
  --port 30303 \
  --mine \
  --minerthreads 1 \
  --etherbase "0x53dc408a8fa060fd3b72b30ca312f4b3f3232f4f"

This configuration enables JSON-RPC access, restricts peer discovery for security, sets a custom network ID, and starts mining on a single thread.

Initiating a Transaction

Open a new terminal window and attach to the running Geth instance via IPC:

cd ether-test
geth --datadir ./db attach ipc:./db/geth.ipc

Once connected to the console:

  1. Pause mining temporarily to simulate real-world transaction queuing:

    > miner.stop()

  2. Unlock the sender account for signing:

    > personal.unlockAccount(eth.accounts[0], '123', 300)
true
    🔐 Note: Unlocking decrypts the account’s private key from the keystore file and holds it in memory for the specified duration (300 seconds). After this period—or after transaction signing—the key is purged for security.

  3. Send 10 ETH from the first account to another:

    > eth.sendTransaction({
    from: eth.accounts[0],
    to: eth.accounts[1],
    value: web3.toWei(10, 'ether')
  })
"0x45b6be881cf86b79dc7ad8bf4d9cbfafc9aa191062411d6606a086bbc42042ed"

You’ve successfully submitted a transaction! The returned string is the Transaction Hash (TxHash)—a unique identifier used to track your transaction across the network.

Monitoring Transaction Status

With mining paused, let’s inspect where our transaction stands.

Check the Transaction Pool

Use txpool.status to view pending and queued transactions:

> txpool.status
{ pending: 1, queued: 0 }

The result shows one pending transaction—our transfer is waiting to be included in a block.

Inspect Transaction Details

Query using the TxHash:

> eth.getTransaction("0x45b6be881cf86b79dc7ad8bf4d9cbfafc9aa191062411d6606a086bbc42042ed")

Output includes:

👉 See how real-time blockchain data can enhance your development workflow.

Mining the Transaction

Now trigger mining to include the transaction:

> miner.start(1); admin.sleepBlocks(1); miner.stop();

This command:

Recheck the pool:

> txpool.status
{ pending: 0, queued: 0 }

No pending transactions—ours has been processed.

Requery the transaction:

> eth.getTransaction("0x...")

Now observe:

The transaction is now permanently recorded on-chain.

Verify the recipient balance:

> web3.fromWei(eth.getBalance(eth.accounts[1]), "ether")
10

✅ Success! The receiver now holds exactly 10 ETH.

Exploring the Block That Confirmed the Transaction

Let’s examine block #1450:

> eth.getBlock(1450)

Key fields explained:

Decode extraData from hex to ASCII:

geth go1.10.3 darwin

This reveals client version and OS info—commonly used for node identification.

Here’s a complete reference of Ethereum block fields:

Ethereum Block Structure Overview

Frequently Asked Questions

Q: What happens if I don’t unlock my account before sending?

A: Without unlocking, Geth cannot access your private key to sign the transaction. The request will fail silently or return an authorization error.

Q: Why does my transaction stay in “pending” state?

A: Transactions remain pending due to low gas prices, network congestion, or node connectivity issues. Miners prioritize higher-paying transactions.

Q: Can I cancel a pending Ethereum transaction?

A: Yes—by sending a replacement transaction from the same address with the same nonce but higher gas price, typically transferring 0 ETH to yourself.

Q: How do I check if a transaction was successful?

A: Use eth.getTransactionReceipt(hash)—if it returns null, the transaction hasn’t been mined yet. Once confirmed, it returns logs and gas usage.

Q: Is it safe to keep accounts unlocked?

A: No. Always limit unlock duration and avoid unlocking on public or untrusted systems. In production, use hardware wallets or signers like MetaMask or Ledger.

Q: What is the purpose of the nonce field?

A: Nonce ensures transaction order and prevents replay attacks. Each transaction from an account must have a sequentially increasing nonce starting at 0.

👉 Start tracking and analyzing Ethereum transactions like a pro — dive into advanced tools now.

By walking through each step—from sending ETH to inspecting block data—you’ve gained firsthand experience with Ethereum’s core mechanics. These foundational skills are essential for developers, auditors, and power users navigating decentralized applications and blockchain ecosystems.