Understanding Ethereum (ETH): A Comprehensive Guide to the Blockchain Platform

Introduction to Ethereum

• Ether (ETH): A digital currency issued on the Ethereum blockchain.
• Compared to Bitcoin (BTC), Ethereum offers a Turing-complete scripting language, enabling users to write decentralized applications (dApps) deployed on the blockchain.

Ethereum Virtual Machine (EVM)

• EVM: A virtual machine maintained by all Ethereum nodes, responsible for executing operations like transfers, contract deployments, and contract calls.

  • Users broadcast transactions to request EVM instructions.
  • EVM reads transactions from the blockchain, converts them into executable commands, and updates the network state.

  • Workflow:

    1. A user broadcasts a transaction, which is added to a block and propagated across the network.
    2. Each node’s EVM instance executes the transaction, updates account data, and stores the latest state locally.
• EVM uses a stack-based language for operations. Example: EVM Codes.

Merkle Patricia Trie (MPT)

• Ethereum stores transactions in blocks but abstracts account data using MPT, a hybrid of:

  • Merkle Tree: Hashed data structure where parent nodes contain child node hashes.
  • Patricia Trie: Prefix tree optimizing storage by grouping accounts with shared prefixes.
• Each block modifies MPT leaf nodes, creating a unique "world state" per block.
• Unlike BTC’s UTXO model, Ethereum requires executing all historical transactions to derive the latest MPT state.

Ethereum Block Structure

• Block Components:

  • Header: Metadata (slot number, proposer ID, parent block hash, state root).
  • Body: Transaction data.

• Key Fields:

  • slot: Block cycle identifier.
  • state_root: Current MPT root hash.
  • PoS blocks omit difficulty and nonce (set to 0).
• Block Time: Ethereum generates a new block every 12 seconds (~150 transactions/block), yielding ~12 TPS.

Ether (ETH) Basics

• Native Token: ETH, divisible to 10¹⁸ Wei.

  • Miners earn ETH rewards for block validation.
  • No supply cap.

Proof of Stake (PoS) Consensus

• Mechanics:

  • Validators stake 32 ETH to participate in block validation.
  • Dishonest nodes lose staked ETH; honest nodes earn rewards.
  • Committees of ≥128 validators vote on blocks, with voting power proportional to stake.
  • Finality: An epoch (32 slots) becomes "finalized" after 2/3 validator approval, ensuring irreversibility.

• Advantages Over PoW:

  • Lower energy consumption.
  • Fixed 12-second block times.
  • 51% attacks require owning >50% staked ETH—economically impractical.

Ethereum Nodes

• Types:

  • Full Nodes: Store complete blockchain data; can validate transactions.
  • Light Nodes: Store headers only; rely on full nodes for block bodies.
  • Archive Nodes: Store full blockchain data + historical EVM states.

• Client Architecture:

  • Execution Client: Handles EVM execution (e.g., Geth).
  • Consensus Client: Validates blocks via PoS (e.g., Prysm).

Sync Methods

• Full Sync: Processes all transactions from genesis (~weeks).
• Snap Sync: Downloads recent MPT snapshots (~hours).
• Light Sync: Minimal validation (~minutes; low security).

Ethereum Accounts

• External Accounts: Controlled by private keys (user wallets).
• Contract Accounts: No private key; created via smart contracts (costs ETH).

Transactions

• Gas Fees: Paid in ETH for EVM computation:

  • Base Fee: Burned to regulate network load.
  • Priority Fee: Optional tip to miners.

• Transaction Types:

  • ETH transfers.
  • Contract deployments/calls.

Smart Contracts

• Definition: Self-executing code stored on-chain for reusable logic.

  • Deployed via transactions; immutable post-deployment.
  • Example: ERC20 token contracts.
• Security: Audits critical; upgrades require migration or proxy patterns.

ERC20 & ERC721 Tokens

• ERC20: Fungible token standard (e.g., stablecoins).
• ERC721: Non-fungible tokens (NFTs) for unique assets.

Scaling Solutions

ETH v2 (Sharding)

• Phases:

  1. Beacon Chain (PoS launch).
  2. Merge (PoW → PoS).
  3. Shard chains (64 parallel chains for throughput).

Layer 2 (Rollups)

• Optimistic Rollups: Assume validity; challenge periods for fraud proofs.
• ZK-Rollups: Use zero-knowledge proofs for instant finality.

FAQs

Q: How does PoS improve Ethereum?
A: PoS reduces energy use, speeds up transactions, and enhances security via staking incentives.

Q: What’s the difference between ETH and Ether?
A: "Ether" (ETH) is the currency; "Ethereum" is the platform.

Q: Can smart contracts be upgraded?
A: Not directly—use proxy contracts or migrations.

👉 Discover more about Ethereum’s future
👉 Explore DeFi on Ethereum