Understanding Public Blockchain and Ethereum 2025: Components, Mining, EVM, Transactions, Accounts, Architecture, and Bitcoin vs. Ethereum
Understanding Public Blockchain and Ethereum 2025 – Blockchain technology has transformed the way digital transactions work. Among different types of blockchains, public blockchains like Ethereum and Bitcoin are the most widely used. In this blog, we will explore what a public blockchain is, understand Ethereum and its components, mining in Ethereum, the Ethereum Virtual Machine (EVM), transactions, accounts, architecture, and how Ethereum compares to Bitcoin.
What is a Public Blockchain?
A public blockchain is a decentralized and open network where anyone can participate. This means that anyone can join the network, validate transactions, and interact with the blockchain. The most popular public blockchains are Bitcoin and Ethereum.
Key Features of Public Blockchains:
- Decentralized: No single entity controls the network.
- Open Access: Anyone with an internet connection can participate.
- Immutable: Transactions recorded on the blockchain cannot be changed or deleted.
- Transparent: All transaction data is visible to everyone.
Ethereum is one of the leading public blockchains that allows developers to create smart contracts and decentralized applications (dApps).
Ethereum and Its Components
Ethereum is a blockchain platform that goes beyond Bitcoin’s purpose of just sending and receiving money. It enables smart contracts, which are self-executing contracts with predefined conditions.
Main Components of Ethereum
- Smart Contracts:
- Smart contracts are programs stored on the blockchain that execute automatically when conditions are met.
- Example: If a buyer sends money to a seller, the contract automatically transfers ownership of a digital asset.
- Decentralized Applications (dApps):
- Applications built on Ethereum that run without central control.
- Example: DeFi apps like Uniswap for cryptocurrency trading.
- Ether (ETH):
- The native cryptocurrency of Ethereum. It is used to pay for transactions and smart contract execution.
- Gas Fees:
- Every transaction on Ethereum requires a fee called gas to compensate miners for their work.
- Ethereum Nodes:
- Nodes are computers that maintain a copy of the blockchain and validate transactions.
Mining in Ethereum
Ethereum initially used Proof of Work (PoW) for mining, just like Bitcoin, but later transitioned to Proof of Stake (PoS) with Ethereum 2.0.
1. Proof of Work (PoW) – Old Ethereum Mining Model
- Miners used high-powered computers to solve complex puzzles.
- The first miner to solve the puzzle added a new block to the blockchain and earned ETH.
- PoW required high electricity and hardware costs.
2. Proof of Stake (PoS) – New Ethereum 2.0 Model
- Instead of mining, Ethereum now uses staking.
- Users who hold and lock their ETH can become validators.
- Validators confirm transactions and are rewarded with ETH.
- PoS is energy-efficient and more scalable than PoW.
Ethereum’s transition to PoS makes it faster, cheaper, and more environmentally friendly.
Ethereum Virtual Machine (EVM)
The Ethereum Virtual Machine (EVM) is the core of Ethereum. It acts as a decentralized computer that executes smart contracts.
Key Functions of EVM:
- Processes Smart Contracts – The EVM ensures that smart contracts run as programmed.
- Provides Security – Every transaction on Ethereum is verified by thousands of nodes, making it secure.
- Enables Interoperability – Developers can write smart contracts in languages like Solidity and deploy them on the EVM.
Without the EVM, Ethereum wouldn’t be able to support decentralized applications and smart contracts.
Transactions in Ethereum
A transaction in Ethereum is an operation that transfers ETH or interacts with a smart contract.
Types of Ethereum Transactions
- Regular ETH Transfer:
- Sending ETH from one wallet to another.
- Requires a sender, recipient, amount, and gas fee.
- Smart Contract Execution:
- Transactions that trigger a smart contract function.
- Example: Swapping tokens on a decentralized exchange.
- Contract Deployment:
- When a developer deploys a new smart contract on the blockchain.
- Staking Transactions:
- Users lock ETH to participate in Ethereum’s Proof of Stake consensus.
Transaction Process in Ethereum
- The sender signs the transaction with their private key.
- The transaction is broadcast to the network.
- Validators confirm and add it to the blockchain.
- The transaction becomes final and cannot be changed.
Ethereum Accounts
Ethereum has two types of accounts:
1. Externally Owned Accounts (EOA)
- Controlled by private keys.
- Used for sending ETH and interacting with smart contracts.
- Example: A wallet like Metamask is an EOA.
2. Contract Accounts
- Controlled by smart contract code.
- Cannot initiate transactions on their own.
- Example: A decentralized lending platform smart contract.
Both account types are essential for Ethereum’s ecosystem.
Ethereum Architecture and Workflow
Ethereum’s architecture consists of multiple layers that ensure smooth blockchain operations.
1. Layer 1 (Base Layer)
- The core Ethereum blockchain.
- Manages transactions, smart contracts, and security.
2. Layer 2 (Scalability Layer)
- Includes solutions like Rollups and Sidechains to process transactions faster and reduce gas fees.
Ethereum Workflow
- A user initiates a transaction.
- Validators confirm the transaction.
- The transaction is included in a block.
- The block is added to the blockchain.
- The new state of Ethereum is updated.
This decentralized and transparent workflow ensures Ethereum remains secure and efficient.
Comparison Between Bitcoin and Ethereum
| Feature | Bitcoin | Ethereum |
|---|---|---|
| Purpose | Digital currency | Smart contracts & dApps |
| Consensus | PoW (Proof of Work) | PoS (Proof of Stake) |
| Block Time | 10 minutes | ~12 seconds |
| Total Supply | 21 million BTC | No fixed supply |
| Smart Contracts | No | Yes |
| Gas Fees | No gas fees | Gas fees for transactions |
Key Differences
- Bitcoin is mainly used for payments, while Ethereum is used for smart contracts and decentralized applications.
- Bitcoin’s PoW is energy-intensive, whereas Ethereum’s PoS is more energy-efficient.
- Ethereum is more flexible, allowing developers to build various applications.
Bitcoin is like digital gold, while Ethereum is like a decentralized computer.
Understanding Public Blockchain and Ethereum 2025 – FAQs
1. What is the main purpose of Ethereum?
Ethereum is designed to support smart contracts and decentralized applications (dApps), unlike Bitcoin, which is only for transactions.
2. How does Ethereum mining work?
Ethereum initially used Proof of Work (PoW) but has now transitioned to Proof of Stake (PoS), where users stake ETH to validate transactions.
3. What is the Ethereum Virtual Machine (EVM)?
The EVM is a decentralized computer that executes smart contracts and ensures transactions run securely.
4. How do Ethereum transactions work?
Transactions are broadcast to the network, validated by nodes, and included in a block. Users must pay gas fees for transactions.
5. What are Ethereum’s main components?
Ethereum includes smart contracts, dApps, accounts, gas fees, nodes, and the Ethereum Virtual Machine (EVM).
6. How is Ethereum different from Bitcoin?
Ethereum supports smart contracts and dApps, while Bitcoin is only used for transactions.
7. What are Ethereum accounts?
Ethereum has Externally Owned Accounts (EOA) for users and Contract Accounts for smart contracts.
Summary
Ethereum is a public blockchain that enables smart contracts, decentralized applications, and transactions. It has shifted from mining (PoW) to staking (PoS) to improve efficiency. The Ethereum Virtual Machine (EVM) runs smart contracts securely, while transactions and accounts play crucial roles in the network. Compared to Bitcoin, Ethereum is more flexible and developer-friendly. Understanding Ethereum’s architecture and workflow helps in exploring the blockchain space and decentralized applications.
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