Key takeaways

• ETH and Ethereum are not interchangeable terms. Ethereum is the network and execution environment; ether, commonly written as ETH, is its native currency.
• Gas is a unit of computational work, not a separate token. The transaction sender normally pays the resulting fee in ETH.
• A smart contract does not act on its own. Its code executes when a transaction or another contract calls it.
• The amount transferred and the network fee are separate. Sending ETH to another address moves value; the gas fee pays for processing that instruction.
• A transaction hash is the main verification handle. It can be used in a compatible block explorer to inspect the network, addresses, status, block, fee, and contract events.

The minimum set of concepts

Ethereum state

At any moment, Ethereum maintains an agreed state containing accounts, balances, contract code, and stored contract data. A valid transaction proposes a change to that state. Nodes execute the transaction according to the protocol rules; if it is valid, the new state is accepted and propagated. State updates accumulate into a chain of cryptographically linked blocks.

Gas and fees

Every operation on Ethereum consumes gas. The sender sets a gas limit and a priority fee; the network multiplies total gas used by an effective gas price to compute the fee in ETH. The fee compensates validators for the resources spent processing and propagating the transaction.

Smart contracts

A smart contract is code deployed at an address. Once deployed, its logic cannot be changed unless the contract itself includes a way to do so. Calling a function is itself a transaction that consumes gas and may modify state.