Sending Bitcoin to a friend, swapping tokens on a decentralized exchange, buying an NFT, voting in a DAO, or sending payments to hundreds of addresses at once—all these actions are technically carried out as transactions. However, they work differently. Let us explore what types of transactions exist in modern blockchains and what happens to them after the “Send” button is clicked.
The first blockchains solved a relatively simple problem. In networks such as Bitcoin and Litecoin, transactions primarily transferred cryptocurrency from one owner to another.
With the emergence of platforms such as Ethereum, BNB Chain, and Solana, the range of possibilities expanded considerably. Today, a single transaction can initiate a token swap, interact with several smart contracts, add assets to a liquidity pool, or execute an entire sequence of actions within a decentralized application.
At the same time, no single, generally accepted classification of blockchain transaction types exists. Therefore, it is more convenient to categorize them according to what actually happens during the operation.
Main types of blockchain transactions
The most straightforward example is a regular cryptocurrency transfer from one address to another. Such operations can conventionally be called simple transactions.
The process looks approximately as follows:
- the wallet owner creates and signs a transaction using their private key;
- the signed operation is transmitted to blockchain nodes and usually enters the queue of unconfirmed transactions;
- the nodes verify its validity, including the signature, availability of funds, and compliance with protocol rules;
- once included in a block, the transaction becomes part of the blockchain’s history.
However, not every transfer follows the simple “one address sends, another receives” model.
Modern networks commonly use complex, or composite, transactions. During such an operation, additional program logic or several interconnected actions are executed. Most often, these types of blockchain transactions involve smart contracts.
A good example is swapping tokens on a decentralized exchange (DEX).
Suppose a user wants to exchange one token for another. Behind the seemingly simple act of clicking the Swap button, there may be a fairly sophisticated process:
- The user selects the assets and specifies the amount to exchange. The application analyzes the available routes and calculates how many tokens the user will receive.
- If the protocol hasn't been authorized to use the selected tokens, separate approval may be required—through a transaction or a cryptographic signature, depending on how the service works.
- The user signs the swap transaction itself and submits it to the network.
- The router contract calls the required smart contracts and executes the swap through one or more liquidity pools.
- If all conditions are successfully met, the original tokens are deducted, and the new asset is transferred to the specified address.
The protocol fee is calculated according to the exchange’s rules, while the network fee is paid to the blockchain to process and execute the transaction.
From the user’s perspective, everything may look like a single operation. Internally, however, it may involve numerous smart contract calls. For example, a swap may simultaneously involve:
- the token contract;
- the liquidity pool contract;
- the exchange or router contract.
With complex routing, the number of interacting contracts can be significantly higher—especially if the swap involves several intermediary assets or protocols.
Another common option is sending funds to multiple recipients at once.
Such batch transactions are used, for example, by mining pools to distribute rewards or by crypto projects for the mass distribution of tokens to ICO* participants and through airdrops*.
* ICO (Initial Coin Offering) is a method of raising funds for a crypto project by issuing and selling its own tokens. The assets received may be used within the project’s ecosystem or provide access to its products and services.
* Airdrop is the free distribution of tokens among users. Projects use airdrops to promote themselves, launch new assets, and reward ecosystem participants. Eligibility requirements may include holding certain tokens, using a protocol, or completing specified actions.
In Bitcoin, you don't need to create a separate transaction for every recipient. A single operation may contain multiple outputs, each sending a specified amount to its own address.
Types of complex blockchain transactions
Smart contract transactions
A smart contract is a program deployed on a blockchain. It executes predefined logic when it receives an appropriate call and the necessary conditions are met. Such operations are especially widespread in decentralized finance (DeFi).
Using smart contract transactions, users can:
- swap tokens;
- buy and sell NFTs;
- create and use DeFi pools;
- add and withdraw liquidity;
- issue and burn tokens*;
- borrow crypto assets and lend them to other users;
- place assets in staking*;
- interact with other decentralized protocols.
* Token burning is the permanent removal of tokens from circulation. To do this, assets may be sent to an inaccessible address or destroyed using a special smart contract function.
* Staking is the locking or delegation of crypto assets to participate in the operation of a blockchain based on Proof-of-Stake or one of its variations and to earn rewards. More broadly, the term is also often used to describe depositing tokens in various crypto protocols to generate income.
However, smart contracts have applications far beyond DeFi. They underpin many DAOs, blockchain games, NFT projects, digital identity services, and other decentralized applications.
Atomic swaps
Exchanging assets from different blockchains usually requires an intermediary, such as a centralized exchange or a specialized cross-chain protocol. Atomic swaps allow two parties to exchange cryptocurrency directly.
The key word here is “atomic.” The transaction is either completed in full or does not take place at all. The mechanics of the exchange are designed to prevent a situation in which one participant has already sent their coins while the other retains both their own funds and the other party’s assets.
The classic atomic swap model is based on HTLCs—Hash Time-Locked Contracts. Funds are locked on different networks using a cryptographic secret and time limits.
If both parties meet the conditions, the exchange takes place. If the transaction is not completed within the specified period, the assets can be returned to their original owners. Thus, trust between the participants is partially replaced by protocol rules and cryptography.
Multisignature transactions
A single private key often controls a regular cryptocurrency wallet. Whoever obtains this key effectively gains the ability to manage the funds.
Multisignature changes this model: an operation requires approval from several key holders. For example, the following schemes may be used:
- 2-of-3—any two out of three signatures are sufficient;
- 3-of-5—the transaction must be approved by at least three out of five participants.
This is particularly convenient for corporate crypto asset custody. Exchanges, custodial services, investment companies, and other organizations may use multisignature mechanisms when giving one person full control over funds would be too risky.
Technically, however, multisignature is more accurately regarded not as a separate universal type of transaction, but as a method of authorizing operations. The implementation of this mechanism depends on the particular blockchain and wallet being used.
Data transactions
A blockchain can store more than information about the movement of coins. A transaction may contain additional information, ranging from a short message to a document hash.
In the Bitcoin network, OP_RETURN, a special Bitcoin Script instruction, is used for this purpose, for example. It allows a limited amount of arbitrary data to be added to an unspendable transaction output. This may include:
- an identifier;
- a technical message;
- a document hash;
- a reference to data stored outside the blockchain;
- other information that needs to be linked to a specific transaction.
Such a record is useful primarily because, once the transaction is added to the blockchain, it confirms that certain data existed at a specific point in time.
In smart contract networks, including Ethereum and Solana, data is handled much more broadly. Information may be passed to smart contracts, stored in their state, or recorded in events and other structures supported by the particular blockchain.
Such types of blockchain transactions are used in asset tokenization, digital identity systems, registries, NFTs, and numerous decentralized applications.
One transaction — many scenarios
The word “transaction” itself may create the impression that it always refers to a transfer of money. In blockchain systems, however, the concept is much broader.
A simple transaction may indeed do nothing more than move cryptocurrency between two addresses. Another operation, however, may simultaneously call several smart contracts, swap several assets, distribute funds among dozens of recipients, or record data on the blockchain.
As blockchain ecosystems evolve, the boundaries between transaction types blur. A single operation may combine several mechanisms at once—for example, it may use multisignature authorization, interact with a smart contract, and transfer several different tokens simultaneously.
Therefore, in practice, it is more useful to distinguish transactions not by rigid categories, but by what action they perform and what logic they trigger within the blockchain.