How Do Ethereum Transactions Work?

We discuss everything you need to know about how Ethereum transactions work. We cover how to send ETH, how to add tokens, and more.

The most important things to remember about Ethereum transactions are:

  1. Ethereum-based transactions all occur on the Ethereum blockchain. Just like with Bitcoin, people create transactions and miners confirm them to the blockchain.
  2. You have to use an Ethereum wallet like MetaMask for sending and receiving Ethereum unless you are using a third party custodial platform like Coinbase.
  3. If you aren’t using a custodial service, you can send all your Ethereum-based tokens to the same address. If you are using a third party custodial platform, then click the deposit button next to each token the platform provides service for to bring up the receiving address that should be used.
  4. For non-custodial wallets, you can keep your ETH and other Ethereum tokens like DAI and ZRX in the same wallet. ETH and all other Ethereum-based tokens can use the same receiving address (Ethereum tokens don’t get unique token specific addresses; nor do they get unique token specific private keys).
  5. Sending Ethereum always costs ETH. ETH paid for transaction fees is called “gas.” Since this is true, you’ll always want to make sure you have enough Ethereum in your wallet to cover fees when not using a custodial service (with custodial services you may pay fees other ways). If you want your transaction to go faster, and you can control the amount of gas you use, try increasing the amount of gas used.
  6. To add tokens to a wallet like MetaMask, click the “add token” button and then enter the contract address (this can be found on a website like
  7. You can interact with dApps using an Ethereum wallet like MetaMask. Interacting with a contract also costs gas, so again, you’ll always want to keep some ETH in an Ethereum wallet you plan on using.

And that is pretty much all there is to it. You’ll use a wallet like MetaMask to interact with dApps and to send and receive ETH and other Ethereum-based tokens, if a token isn’t showing in your wallet, simply add it, and don’t forget to keep some ETH in your wallet to pay for gas!

Author: Thomas DeMichele

Thomas DeMichele has been working in the cryptocurrency information space since 2015 when was created. He has contributed to MakerDAO, Alpha Bot (the number one crypto bot on Discord),...