The Global State Machine

Ethereum is easiest to understand as a replicated state machine. Every node processes the same ordered transactions, runs the same execution rules, and should land on the same updated state after each block.

The important shift from Bitcoin is persistence. Ethereum contracts can hold storage between calls, so the chain does not just verify transfers - it hosts long-lived applications with memory.

Because state is global, contracts can compose inside one transaction. A swap can touch tokens, pools, price oracles, and lending logic atomically, with all changes applied together or all reverted together.