Chapter · Master Ethereum
Accounts and ETH as fuel
Bitcoin tracks money as separate chunks, a bit like a wallet full of specific bills. Ethereum instead uses accounts with balances, more like a bank account that shows one number that goes up and down. There are two kinds of account: ones controlled by a person with a private key, and ones that are smart contracts. Both have an address and can hold ETH. This account model makes it easier for contracts to keep running balances for many users.
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What this lesson covers
Keys mean control
Whoever holds the private key to an account controls the ETH and tokens inside it. There is no support line that can reset it for you. This is the heart of self-custody, which we cover later. For now, remember two things: ETH is the fuel you always need a little of, and your key is the thing you must never share or lose.
What you get asked
How does Ethereum mainly track ownership compared with Bitcoin?
Ethereum uses an account model with balances. Bitcoin uses the UTXO model, tracking discrete unspent chunks. Both are valid designs with different strengths.
Bitcoin's model of tracking separate unspent coin chunks is known as the ___ model.
UTXO stands for unspent transaction output. Ethereum chose the account model instead, which suits smart contracts that hold balances for many users.
Why do you always need a little ETH in your account?
Every action costs gas, and gas is paid in ETH. Even to move a token, you need a small ETH balance to cover the fee.
Match each Ethereum term to its meaning
An account is an address with a balance. A person controls theirs with a private key, while a contract account is controlled by its code. ETH pays for it all.
The rest of this chapter
Learn how Ethereum works as a programmable blockchain, from smart contracts and gas to staking, Layer 2s, and DeFi.