Mastering Ethereum

Chapter 7. Smart Contracts and Solidity

As we discussed in Chapter 2, there are two different types of accounts in Ethereum: externally owned accounts (EOAs) and contract accounts. EOAs are controlled by users, often via software such as a wallet application that is external to the Ethereum platform. In contrast, contract accounts are controlled by program code (also commonly referred to as “smart contracts”) that is executed by the Ethereum Virtual Machine. In short, EOAs are simple accounts without any associated code or data storage, whereas contract accounts have both associated code and data storage. EOAs are controlled by transactions created and cryptographically signed with a private key in the “real world” external to and independent of the protocol, whereas contract accounts do not have private keys and so “control themselves” in the predetermined way prescribed by their smart contract code. Both types of accounts are identified by an Ethereum address. In this chapter, we will discuss contract accounts and the program code that controls them.

What Is a Smart Contract?

The term smart contract has been used over the years to describe a wide variety of different things. In the 1990s, cryptographer Nick Szabo coined the term and defined it as “a set of promises, specified in digital form, including protocols within which the parties perform on the other promises.” Since then, the concept of smart contracts has evolved, especially after the introduction of decentralized ...