Ethereum Homestead FAQ: Your Complete Guide to Common Questions

Introduction to Ethereum Basics

What is Ethereum?

Ethereum is a decentralized smart contract platform powered by its native cryptocurrency, Ether (ETH). It enables developers to build decentralized applications (DApps) that execute exactly as programmed without downtime, censorship, or third-party interference. At its core, Ethereum combines blockchain technology with a Turing-complete virtual machine (EVM) to process complex contractual agreements.

Key Ethereum Components Explained

Geth: The official Go implementation of an Ethereum node, serving as the backbone for blockchain interactions (view installation guide).
Mist: A user-friendly browser for DApps and wallet management (download here).
Ethminer: A standalone mining tool compatible with Ethereum clients.
Mix: An IDE for DApp development and debugging.

👉 Discover advanced Ethereum mining strategies

Technical Deep Dive

Storing Large Files on Blockchain

While possible, storing large files directly on-chain is impractical due to cost. Instead, consider:

IPFS for decentralized file storage
Storing file hashes on-chain with metadata off-chain

Account vs. Wallet Contracts

Feature	Regular Account	Wallet Contract
Control	Private key	Smart contract logic
Features	Basic transfers	Multi-sig, spending limits
Creation	Client-generated	Mist GUI or custom code

Blockchain Sync Time

Synchronizing with the Ethereum mainnet typically requires 10GB+ of data (as of 2024). Optimization methods include:

Fast sync mode
Using archival nodes for historical data

Advanced Functionality

Contract-to-Contract Calls

Yes, contracts can:

Call other contract functions
Pass ETH during calls
Create new contracts programmatically

Offline Transaction Signing

The process involves:

1. Create unsigned TX
2. Sign offline
3. Broadcast via online node

Testnet ETH Acquisition

Obtain free ETH for development via:

Ropsten faucets
Geth's built-in miner
Third-party testnet services

👉 Explore Ethereum development tools

Security & Privacy

Data Encryption Status

On-chain: Encoded but public
Options: Local encryption pre-broadcast
Privacy solutions: zk-SNARKs research ongoing

Mining Decentralization

Ethereum counters centralized mining through:

GHOST protocol (reduces orphan block losses)
ASIC-resistant Ethash algorithm
Planned PoS transition in Serenity update

Scaling Solutions

Achieving 10,000+ TPS

Roadmap includes:

Sharding implementation
Casper FFG consensus
Layer 2 rollups

FAQ Section

Q: Can contracts self-fund gas costs?

A: No, transaction initiators must always pay gas fees.

Q: Are third-party TX broadcasts possible?

A: Technically yes, but nonce management complicates this.

Q: Can contracts pull API data?

A: Not directly - requires oracle services for external data.

Q: Where are smart contracts stored?

A: Across all full nodes executing the EVM.

Q: Handling blockchain bloat?

A: State pruning and stateless clients in development.

Q: Storing private data?

A: On-chain storage isn't private - use encryption carefully.