Ethereum's blockchain introduces unique concepts that are fundamental to its operation. This article breaks down core elements like accounts, transactions, gas, and gas limits to help you navigate the ecosystem with confidence.
Ethereum Accounts: The Basics
In Ethereum, an account is a fundamental entity that can hold Ether, execute transactions, or interact with smart contracts. There are two primary types of accounts.
Externally Owned Accounts (EOA)
An Externally Owned Account is controlled by a private key and has the following characteristics:
- Holds an Ether balance.
- Can initiate transactions to transfer Ether or trigger smart contract functions.
- Has no associated code.
Contract Accounts
A Contract Account is controlled by its code and possesses these traits:
- Holds an Ether balance.
- Contains associated smart contract code.
- Executes code when triggered by transactions or messages from other contracts.
- Operates with Turing-complete flexibility and can interact with other contracts.
All actions on the Ethereum blockchain begin with transactions initiated by an EOA.
Transactions and Messages
Transactions
A transaction refers to a signed data package sent from an EOA to another account. It includes:
- The recipient’s address.
- A digital signature verifying the sender’s intent.
- A value field indicating the amount of Ether (in Wei) to transfer.
- An optional data field for smart contract inputs.
- A
GASLIMITvalue, capping the computational steps allowed. - A
GASPRICEvalue, specifying the fee the sender is willing to pay per unit of gas.
👉 Explore transaction details and tools
Messages
Messages are virtual objects used for internal communication between contracts. They are similar to function calls and include:
- The sender’s address.
- The recipient’s address.
- An optional data field for inputs.
- A
GASLIMITfor the execution.
While often confused with transactions, messages are generated by contracts during execution via CALL or DELEGATECALL operations.
What Is Gas?
Gas is the unit measuring computational effort required for operations on the Ethereum Virtual Machine (EVM). Each opcode in the EVM has a fixed gas cost. Gas ensures network efficiency by charging for resource usage, discouraging unnecessary on-chain computation.
Gas and Transaction Costs
Every transaction specifies:
gasLimit: The maximum gas units the transaction can consume.gasPrice: The price (in Wei) the sender pays per gas unit.
Miners prioritize transactions with higher gas prices. If execution consumes less gas than the limit, the unused gas is refunded. If it exceeds the limit, execution reverts, but the spent gas is not refunded.
Estimating Transaction Costs
The total fee is calculated as:
Transaction Fee = gasUsed × gasPrice
gasUsed: Sum of gas costs for all executed operations.gasPrice: Set by the user; miners often prefer higher values.
For example:
- A simple Ether transfer uses ~21,000 gas.
- At a gas price of 20 Gwei, the fee is 21,000 × 20 Gwei = 0.00042 ETH.
Token transfers typically require 50,000–100,000 gas, resulting in higher fees.
Block Gas Limit
The block gas limit is the maximum total gas allowed in a single block. It determines how many transactions a block can include. For instance:
- If the block gas limit is 1,000,000 gas, it can hold ~47 simple transfers (21,000 gas each).
- Miners can adjust the limit per block by ±0.0976%.
Who Sets the Block Gas Limit?
Miners collectively determine the gas limit through client configurations. Default settings in clients like Geth and Parity allow dynamic adjustment based on network demand.
Adjusting the Gas Limit
Miners can configure their clients to support network scalability:
- Geth: Use
--targetgaslimitto set a baseline. - Parity: Adjust via
--gas-floor-targetand--gas-cap.
These settings help balance throughput and security.
Ethereum Network Congestion and DoS
Network congestion occurs when blocks are consistently full, leading to transaction delays. This can result from:
- Malicious DoS Attacks: Attackers spam low-cost transactions to clog the network. Past incidents required miners to temporarily lower gas limits.
- Non-Malicious Congestion: High demand from activities like token sales (ICOs) naturally fills blocks.
During congestion, users may need to increase gas prices to expedite transactions.
Why Doesn’t the Gas Limit Auto-Adjust?
Ethereum’s protocol allows miners to vote on gas limits dynamically. However, many miners disable this feature after past attacks, leading to stagnant limits during high demand. Reactivating dynamic adjustments is essential for scalability.
Tools like ETH Gas Station provide real-time data on miner policies and network conditions.
Frequently Asked Questions
What is the difference between an EOA and a contract account?
An EOA is controlled by a private key and can initiate transactions. A contract account is governed by its code and executes actions only when triggered by transactions or messages.
How do I estimate gas for a transaction?
Use Ethereum clients’ estimateGas function or tools like MyEtherWallet. Always set a gas limit slightly above the estimate to avoid failures.
Why would a transaction fail due to gas?
If execution exceeds the gas limit, operations revert, and the spent gas is forfeited. This prevents infinite loops and inefficient code.
What determines transaction confirmation time?
Miners prioritize transactions with higher gas prices. During network congestion, fees must be competitive for timely processing.
Can gas prices be zero?
Technically yes, but miners typically ignore zero-fee transactions, as they offer no incentive.
How do miners adjust gas limits?
Miners configure clients like Geth or Parity with flags like --targetgaslimit to influence block gas limits based on network needs.
Understanding Ethereum’s core mechanics—accounts, transactions, gas, and limits—empowers users to interact with the network efficiently. Stay informed about network conditions and adjust your strategies accordingly.