Let's familiarize with Ethereum Accounts, namely their types. In Ethereum, there are two types of Accounts:

  •  Externally Owned Accounts 
  •  Contract Accounts. 

Accounts can function as wallets, though they can also be used to do things other than hold Ether. We’ll focus on their wallet functions, in which case an Account is considered as merely a private key+address pair.

Externally owned account (EOAs) is an account controlled by a private key, and if you own the private key associated with the EOA you have the ability to send ether and messages from it.

Contract-based wallets are more robust and can be more secure. For example, a contract can be set up to require transfers over a certain threshold to be approved by multiple people. Even if these keys all reside on your local computer, having to compromise also a slightly-improved 2 of 3 can provide far greater security than a single key alone.

Additionally, contract-based accounts benefit from transaction receipts, which contain a permanent log of all events. It makes it much easier to inspect the state and verify the history of a contract. 

Standard accounts benefit from none of this and can only send transactions, not respond autonomously.

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