Ether Transfer

For a simple ether transfer,  the amount of transfer, target address, along with fees or gas points.

The amount in the fees is transferred to the respective accounts.

An Ethereum node represents the computational business unit or individual participant in the blockchain network.

An Ethereum full node holds the software for transaction initiation, Validation, Mining, Block Creation, Contract Execution, and EVM ( Ethereum Virtual Machine)

The smart contract is Object Oriented code written in a programming language like Solidity.

The Smart Contract is compiled and deployed to EVM.

When the target address in a transaction is a smart contract. The execution code corresponding to the smart contract is executed on the EVM. The input required (if any) to execute the smart contract is extracted from the payload of the transaction.

State of the smart contract may be changed by this execution. Results of the executions are stored in the receipts.

A blockchain maintains both, the state hash and the receipt hash.

All the transactions in the blockchain are validated. Validation includes the timestamp and the nonce of the transaction and also that the required fee is available in the account.

Miner nodes in the network receive, verify, gather and execute transactions. The invoked smart contract code are executed by all miners. Validated transactions are broadcasted and gathered for block creation. The consensus protocol used here is a memory based rather than a CPU based PoW (Proof of Work)

Who pays for verification, validation, and consensus?

The incentive model in the next lesson will answer this question.