6.1 Ethereum platform architecture
3 min read•july 18, 2024
Ethereum's architecture is a complex system of interconnected components. At its core, the executes , while accounts, state management, and work together to create a secure, decentralized platform.
The EVM provides a runtime environment for smart contracts, ensuring deterministic execution across the network. Ethereum's dual account system, mechanism, and client software form the backbone of this revolutionary blockchain platform, enabling the creation of decentralized applications.
Ethereum Platform Architecture
Components of Ethereum architecture
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- Ethereum Virtual Machine (EVM)
- Decentralized, Turing-complete virtual machine executes smart contracts
- Ensures deterministic execution across all nodes participating in the network
- Maintains security and integrity of the Ethereum blockchain
- Ethereum accounts
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- Controlled by private keys held by users initiating transactions
- Interact with smart contracts deployed on the Ethereum network
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- Controlled by the code stored within them defining their behavior
- Activated when receiving transactions from EOAs or other contracts
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- Ethereum state
- Represents the current state of the Ethereum blockchain at a given point in time
- Includes account balances, contract storage, and deployed contract code
- Updated with each transaction processed on the network
- Gas and
- Mechanism to prevent infinite loops and resource exhaustion on the network
- Users pay gas fees in Ether for computational resources consumed by their transactions
- Incentivizes miners to include transactions in blocks they propose
- Ethereum clients and nodes
- Software implementations of the Ethereum protocol (Geth, Parity)
- Maintain a local copy of the blockchain and participate in consensus
- Validate transactions and blocks, propagating them across the network
Role of Ethereum Virtual Machine
- Provides a runtime environment for smart contracts deployed on Ethereum
- Executes bytecode compiled from high-level programming languages (, )
- Ensures deterministic execution of smart contracts across all nodes in the network
- Maintains a stack-based architecture with a limited instruction set for security
- Prevents access to external resources to maintain determinism and reproducibility
- Charges gas for each computational step to prevent infinite loops and resource exhaustion
- Enables the creation of decentralized applications (DApps) on the Ethereum platform
EOAs vs contract accounts
- Externally Owned Accounts (EOAs)
- Controlled by private keys held by users initiating transactions
- Can initiate transactions and interact with smart contracts deployed on Ethereum
- Have an Ether balance but no associated code defining their behavior
- Represent user accounts on the Ethereum network
- Contract Accounts
- Controlled by the code stored within them defining their behavior and state
- Cannot initiate transactions on their own, only activated by incoming transactions
- Have an Ether balance and associated code (smart contract) governing their actions
- Can execute complex logic and interact with other contracts on the network
- Enable the creation of decentralized applications (DApps) and autonomous entities
Gas in Ethereum ecosystem
- Unit that measures the computational effort required to execute operations on Ethereum
- Each operation in the EVM has an associated gas cost based on its complexity
- Gas costs are determined by the resource consumption of the operation (storage, computation)
- Users specify a gas limit and gas price when submitting transactions to the network
- Gas limit: Maximum amount of gas the user is willing to consume for the transaction
- Gas price: Amount of Ether the user is willing to pay per unit of gas consumed
- Transactions that exceed the gas limit or have insufficient gas will be reverted
- Gas fees are paid in Ether and awarded to miners as an incentive for including transactions
- Prevents infinite loops, resource exhaustion, and denial-of-service attacks on the network
- Ensures fair allocation of network resources and prevents abuse by malicious actors
Key Terms to Review (24)
Community Governance: Community governance refers to a decentralized approach where stakeholders within a network, such as a blockchain community, participate in decision-making processes that affect their shared resources and collective future. This concept fosters transparency, accountability, and collaboration among participants, allowing them to influence policies and operational guidelines that affect the ecosystem. It is closely tied to the mechanics of platforms and the distinction between open and closed systems.
Consensus Layer: The consensus layer is a fundamental component of blockchain architecture responsible for ensuring that all participants in the network agree on the state of the blockchain. It establishes rules and processes that validate transactions and add them to the blockchain in a secure and decentralized manner. This layer is crucial in maintaining the integrity and reliability of the blockchain by preventing double-spending and ensuring that all nodes reach a consensus before any updates are made to the distributed ledger.
Contract Accounts: Contract accounts are special types of accounts on the Ethereum platform that store and execute smart contracts, allowing for decentralized applications to run on the blockchain. These accounts are distinct from regular user accounts in that they contain executable code, enabling automatic and self-enforcing agreements without the need for intermediaries. When a transaction interacts with a contract account, it triggers the execution of the code stored within it, which can modify the state of the blockchain or transfer tokens based on predefined conditions.
Decentralization: Decentralization refers to the distribution of authority, control, and decision-making away from a central authority to multiple entities or nodes. This concept is fundamental to blockchain technology, as it enhances security, promotes transparency, and allows participants to have greater control over their data and transactions, fostering trust in a system without relying on a single point of failure.
Decentralized finance (DeFi): Decentralized finance (DeFi) refers to a financial ecosystem built on blockchain technology that allows individuals to access financial services without the need for traditional banks or intermediaries. This ecosystem leverages smart contracts, primarily on platforms like Ethereum, enabling activities such as lending, borrowing, trading, and earning interest in a transparent and open manner.
EIP-1559: EIP-1559 is an Ethereum Improvement Proposal that introduced a new transaction fee mechanism to the Ethereum network, aimed at making transaction fees more predictable and efficient. It replaces the first-price auction system with a dual fee structure, consisting of a base fee and a tip for miners. This change enhances user experience on the platform by stabilizing gas prices and allowing better gas optimization practices.
EIP-20: EIP-20 is an Ethereum Improvement Proposal that defines a standard interface for fungible tokens on the Ethereum blockchain. This standardization allows for interoperability between tokens and applications, making it easier for developers to create and interact with various tokenized assets. EIP-20 has been instrumental in the growth of decentralized finance (DeFi) and the broader adoption of tokenized assets across the Ethereum platform.
ERC-721: ERC-721 is a technical standard for non-fungible tokens (NFTs) on the Ethereum blockchain, allowing for the creation of unique digital assets that can represent ownership of items like art, collectibles, and virtual real estate. This standard defines the interface and functions for managing ownership and transferring these unique tokens, distinguishing them from fungible tokens like ERC-20. The uniqueness of ERC-721 tokens poses legal and technical challenges, particularly in terms of intellectual property rights and ensuring secure transactions on the Ethereum platform.
Ethereum Improvement Proposals (EIPs): Ethereum Improvement Proposals (EIPs) are standardized documents that outline new features, changes, or processes for the Ethereum network. They serve as a way for developers and the community to suggest improvements and enhancements to the Ethereum protocol, enabling collaborative decision-making and innovation within the ecosystem. EIPs play a vital role in maintaining the Ethereum platform architecture by establishing a clear path for development and protocol upgrades.
Ethereum Virtual Machine (EVM): The Ethereum Virtual Machine (EVM) is a decentralized computing environment that enables the execution of smart contracts and decentralized applications (dApps) on the Ethereum blockchain. It acts as a runtime environment, allowing code written in Ethereum's programming language, Solidity, to be executed in a secure and deterministic manner across all nodes in the network. The EVM's architecture ensures that every transaction is processed uniformly, maintaining consensus and integrity across the Ethereum platform.
Execution layer: The execution layer is a critical component of the Ethereum platform that handles the processing and execution of transactions and smart contracts. It is responsible for executing the logic defined in smart contracts, maintaining the current state of the Ethereum network, and ensuring that all operations are carried out accurately and efficiently. This layer interacts directly with the Ethereum Virtual Machine (EVM), enabling decentralized applications (dApps) to function and communicate on the blockchain.
Externally Owned Accounts (EOAs): Externally Owned Accounts (EOAs) are a type of account in Ethereum that are controlled by private keys and can be created by any user. They allow individuals to send and receive Ether and interact with smart contracts on the Ethereum network. EOAs are fundamental to the Ethereum platform architecture as they provide the interface for users to participate in the blockchain ecosystem, facilitating transactions and contract interactions.
Gas: Gas is a unit of measurement used on the Ethereum platform to quantify the computational effort required to execute transactions or run smart contracts. This concept is crucial for ensuring that users pay for the resources they consume on the network and helps prevent spam or abuse by requiring a fee for every operation. Gas connects directly to Ethereum's transaction processing, incentivizing miners to validate transactions based on the gas price set by users.
Gas fees: Gas fees are the costs required to perform transactions or execute smart contracts on blockchain networks, particularly Ethereum. These fees serve as an incentive for miners or validators to process and confirm transactions, playing a crucial role in the transaction lifecycle, the execution of smart contracts, and overall network security and efficiency.
Interoperability: Interoperability refers to the ability of different blockchain networks and systems to communicate, share data, and work together seamlessly. This capability is crucial for creating a connected ecosystem where assets, information, and services can move freely across various platforms, enhancing collaboration and functionality.
Layer 1 vs. Layer 2 Solutions: Layer 1 refers to the base blockchain architecture, like Ethereum, which is responsible for the network's security and transactions. Layer 2 solutions are built on top of Layer 1 to improve scalability and efficiency by processing transactions off the main chain. This distinction is crucial as it highlights how blockchain networks can handle increased demand while maintaining speed and reducing costs, addressing some of the most significant challenges faced by decentralized platforms.
Peer-to-peer network: A peer-to-peer network is a decentralized communication model where each participant, or 'peer', can act as both a client and a server, sharing resources directly with one another without relying on a central server. This structure enables participants to connect and communicate directly, fostering collaboration and resource sharing among users. In the context of distributed technologies, such as blockchain and Ethereum, this architecture is crucial for enabling nodes to function independently while still maintaining a cohesive system.
Proof-of-Work vs. Proof-of-Stake: Proof-of-Work (PoW) and Proof-of-Stake (PoS) are two consensus mechanisms used to validate transactions and secure blockchain networks. PoW relies on computational power to solve complex mathematical problems, while PoS allows validators to create new blocks based on the number of coins they hold and are willing to 'stake' as collateral. Understanding these mechanisms is crucial for grasping how the Ethereum platform operates, especially as it transitions from PoW to PoS with Ethereum 2.0, impacting scalability, energy consumption, and decentralization.
Rollups: Rollups are a Layer 2 scaling solution that allows for the aggregation of multiple transactions into a single batch, which is then submitted to the main blockchain. This process improves scalability and reduces costs by minimizing the number of on-chain transactions, while still maintaining the security and integrity of the underlying blockchain. By leveraging rollups, platforms can enhance transaction throughput and lower fees, which is essential for accommodating a growing user base and diverse applications.
Sharding: Sharding is a database architecture technique that involves breaking down a large dataset into smaller, more manageable pieces called shards. This approach helps to enhance scalability and performance by distributing the load across multiple servers. In the blockchain context, sharding enables parallel processing of transactions, which is crucial for addressing scalability challenges and ensuring efficient consensus mechanisms, especially within platforms like Ethereum.
Smart contracts: Smart contracts are self-executing contracts with the terms of the agreement directly written into code, stored, and replicated on a blockchain. They automatically enforce and execute the terms when predetermined conditions are met, eliminating the need for intermediaries and ensuring trust and transparency in transactions.
Solidity: Solidity is a high-level programming language specifically designed for writing smart contracts on blockchain platforms, especially Ethereum. It allows developers to create self-executing contracts with the terms of the agreement directly written into code. Solidity plays a crucial role in the execution environments of smart contracts, facilitating their deployment and interaction within the broader Ethereum architecture.
Transaction fees: Transaction fees are costs incurred when a user initiates a transaction on a blockchain, often paid to incentivize miners or validators to process and confirm the transaction. These fees play a crucial role in maintaining the efficiency of the network by prioritizing transactions, especially during times of high demand, and also contribute to the overall governance of blockchain protocols. They are particularly important in systems utilizing Proof of Work, as miners receive these fees as part of their compensation for securing the network and processing transactions.
Vyper: Vyper is a high-level programming language specifically designed for writing smart contracts on the Ethereum blockchain. It aims to be more secure and easier to understand than other languages like Solidity, emphasizing simplicity and readability, making it more accessible for developers and reducing the risk of bugs in smart contract code.