What Is the Account Model?
The account model is how Ethereum and most smart-contract chains keep score: each address has a balance and, if it is a contract, some storage. Send 1 ETH and the protocol subtracts 1 from you and adds 1 to them. No change outputs. No pile of leftover bills. It feels like a bank ledger because it is one, just a public one.
How It Actually Works
- Externally owned accounts are key-controlled, see private keys. Contract accounts are code-controlled. Tokens live in those contracts' ledgers, which is why your USDC "balance" is an entry in the USDC contract, not in ETH itself.
- Global state makes smart contracts natural: they can look up balances, lock funds, and call each other in one transaction. Bitcoin's UTXO model can do clever things, but this is why DeFi grew here.
- The same convenience is why approvals and drainers work: a contract you approved can debit the token ledger without you sending a visible "payment."
Risks and Common Mistakes
- Sending a token to a contract that cannot handle it, or to the right address on the wrong network. The account looks identical. The state machines are not.
- Reading an ETH balance and forgetting the token balances live next door. Explorers show both; learn that split in my Etherscan review.
- Assuming Bitcoin advice maps one-to-one. Change addresses, coin control, and UTXO consolidation do not apply here. Approvals and allowance hygiene do.
When It Matters
Using any EVM wallet, debugging a "missing" token, and understanding why Ethereum can run dapps that Bitcoin does not try to be. Pair with the Security page for the approval half.
Related Terms
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