It's a **smart contract** deployed on Ethereum controlled by the logic of a code. its creation costs because it uses resources from the Blockchain, it can execute different actions such as transferring  token etc. 

Finally it only sends transaction in response to a receiving one.

University of Michigan - Ann Arbor

In Ethereum, the state is made up of objects called "accounts", with each account having a 20-byte address and state transitions being direct transfers of value and information between accounts. An Ethereum account contains four fields:

-The nonce, a counter used to make sure each transaction can only be processed once
-The account's current ether balance
-The account's contract code, if present
-The account's storage 

Ethereum Accounts 

An account  controlled by someone with a private Key, made up of a cryptographic private and public Key, it costs nothing to create one, it can interact with other Externally-owned accounts and smart contracts as well. Only this type of Account can initiate a transaction

Externally-Owned Account

Contract Account

An account under Ethereum has four fields:

- **nonce**: This counter tracks the number of transactions sent from an externally-owned account or the number of contracts created by a contract account.
- **balance**: The number of wei owned by this address.
- **codeHash**: This hash refers to the code of an account on the Ethereum virtual machine (EVM, it cannot be changed.
- **storageRoot**: is a 256-bit hash that represents the root node of a **Merkle Patricia tree**,  each Ethereum account has its own storage trie that stores the account's state.

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