🧠 Understanding Ethereum: EVM, Blocks, Gas, Accounts & Transactions Explained

This content originally appeared on DEV Community and was authored by Allan Githaiga

Ethereum is more than just transfers of ETH — it’s a decentralized global computer powered by nodes and fueled by gas. Let’s break down its core components to help you grasp why it works the way it does.

1. The Ethereum Virtual Machine (EVM)

What it is: The EVM is the runtime engine powering Ethereum, a virtual CPU that runs smart contracts and processes transactions.

Why it matters:

• It ensures every node executes code deterministically, so all states stay in sync.

• It supports a defined set of opcodes (like ADD, JUMP, SLOAD), with each costing gas based on the amount of computation required .

Analogy:
Think of Ethereum as a massive online code playground, and the EVM as the consistent engine that runs your code—even on someone else’s computer. Every time you press “execute,” it runs exactly the same way.

2. Blocks: Ethereum’s Time Capsules

What it is: Ethereum groups transactions into blocks, each containing:

• Block number, timestamp

• Gas limit (cap for total gas used) & gas used

  Transaction list, Merkle roots, parent hash, and proposer’s signature.
  Why it matters:

• Blocks batch transactions to maintain consensus across nodes.

• Each block advances the state, forming a permanent ledger of changes.

Analogy:

Blocks are like train cars, each carrying multiple passenger transactions and connected to the previous one to form a train—a never-ending ride.

3. Gas: Ethereum’s Fuel Meter

What it is: Gas measures how much computation you’re using. Every EVM opcode requires a specific gas amount .
Why we pay gas:

• It prevents spam and infinite loops.

• It pays validators for computation.

• It ensures execution stays deterministic and bounded.

Gas Units vs. Gwei:

• Gas units = computational steps

• Gwei = 10⁻⁹ ETH, used to price each gas unit.

Example with Analogy:
Imagine riding a motorbike:

• Distance = gas units

• Fuel price per km = base fee + priority tip

• You load your bike with just enough fuel (gas limit) and tip for priority service (priority fee).

4. Accounts: EOAs vs. Contract Accounts

Ethereum has two account types

1. EOA (Externally Owned Account)

• Controlled by a private key

• Can initiate transactions

• No code, just ETH balance

2. Contract Account

• Live code at an address

• Can store data, and run logic when triggered

• Cannot initiate transactions—EOAs must call them

Analogy:
EOAs are like people with wallets, while contract accounts are like vending machines: they respond to your actions, they can hold funds, but they don’t make moves on their own.

5. Transactions: State-Changing Actions

What they are: The only way to change Ethereum’s state (send ETH, create contracts, interact with smart contracts).

Transaction content includes:

• from, to, value, nonce

• gasLimit, maxFeePerGas, maxPriorityFeePerGas

• data (optional), signature components

Stages of a transaction:

1. Signed by your private key

2. Broadcast to mempool

3. Picked by a validator

4. Executed, state updated, included in a block

5. Block finalized—permanent record

Analogy:
Think of it like ordering at a busy coffee shop:

• You put in your order (transaction)

• It goes on the queue (mempool)

• A barista (validator) makes it (executes)

• You wait until they confirm your order is done (block inclusion)

• You finally drink it when it’s served (finalization)

Recap Table

Why This Matters

By understanding these pillars:

• You’ll optimize gas usage

• Avoid common errors like low gas limits

• Build or interact with contracts more confidently

• Understand transaction lifecycles and how fees work

This content originally appeared on DEV Community and was authored by Allan Githaiga