Articles on: Blockchain Explained

What is an Internal Transaction?

In simpler terms, an internal transaction in Ethereum happens when a computer program, known as a smart contract, is automatically triggered by an outside transaction. These smart contracts are like self-executing agreements that run on the Ethereum blockchain without the need for a middleman.

When people interact with these smart contracts, it can lead to internal transactions, which are actions or transfers of value that occur within the blockchain system. These transactions are often not directly visible to users and can involve multiple steps or side effects.

Unlike regular transactions, internal transactions don't have a digital signature and are usually kept off the main blockchain. Some are stored on the blockchain but require extra resources. They mainly involve the transfer of Ether, Ethereum's native digital currency, affecting the balances of addresses.

Updated on: 02/01/2024

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