Ethereum Basics: A Comprehensive Guide to Smart Contracts and Transactions

Introduction to Smart Contracts

Smart contracts are self-executing programs stored on blockchain platforms like Ethereum. They automate contractual agreements without intermediaries, ensuring trustless and transparent execution. This guide explores key Ethereum concepts, tools, and transaction types essential for developers and enthusiasts.

Solidity: The Smart Contract Language

"Solidity is an object-oriented programming language for writing smart contracts. It is used for implementing smart contracts on various blockchain platforms, most notably, Ethereum." — Wikipedia

Key Features:

• High-level language with JavaScript-like syntax
• Compiles to bytecode for Ethereum Virtual Machine (EVM)
• Official documentation: Solidity Documentation

👉 Master Solidity with these advanced tips

Essential Ethereum Tools

MetaMask Wallet

• Primary Features:

  • Chrome extension with fox logo
  • Manages external accounts (EOAs)
  • Supports testnet switching and custom RPC networks

Tip: Always back up your private keys securely—they control access to your Ether holdings.

Remix IDE

• Browser-based Solidity compiler with:

  • Interactive debugging
  • Contract deployment tools
  • Direct access: Remix Ethereum

Ethereum Accounts Explained

Key Differences:

• EOAs hold Ether but lack code
• Contract accounts store both Ether and EVM-executable code

Transaction Mechanics

Transaction Fees Structure

• Gas: Computational unit measurement
• Gas Price: Ether cost per unit (market-driven)
• Gas Limit: Maximum units a sender will pay for

Example: If GasUsed < GasLimit, only actual cost is charged. If GasUsed exceeds GasLimit, all GasLimit fees are forfeited.

Transaction Types

1. Value Transfer

   web3.eth.sendTransaction({
     from: "0xSenderAddress",
     to: "0xReceiverAddress",
     value: 1000 // in Wei
   })

2. Contract Creation

   • Empty to field with compiled code in data

3. Contract Execution

   • Targets contract address with method calls in data

Interacting with Contracts

Methods

1. Remix IDE (Manual testing)

2. Programmatic Libraries:

   • Python: web3.py
   • JavaScript: web3.js
   • Infura API for RPC endpoints

Infura Network Endpoints

Example Call:

from web3 import Web3
w3 = Web3(Web3.HTTPProvider("https://rinkeby.infura.io/v3/YOUR-ID"))
# ... (deployment logic)

Security Notes: tx.origin vs msg.sender

• tx.origin: Always the original EOA (never a contract)
• msg.sender: Immediate caller (could be another contract)

Scenario: User → Contract A → Contract B
- For A: Both = User
- For B: tx.origin = User, msg.sender = Contract A

👉 Secure your contracts with these best practices

FAQ Section

Q1: How do I estimate proper Gas limits?
A1: Use testnets to simulate transactions and adjust Gas based on execution traces.

Q2: Can contracts initiate transactions?
A2: No—only EOAs can start transactions, though contracts can call other contracts.

Q3: What’s the main risk with tx.origin?
A3: It can enable phishing if contracts blindly trust tx.origin for authentication.

Q4: How are contract addresses determined?
A4: Derived from creator’s address and their transaction count (nonce).

Q5: Why use Infura over local nodes?
A5: Infura provides scalable, maintained infrastructure without syncing blockchain history locally.