Is it the ethanol, the ethanal, or the ethanoic acid?
It's the ethanol. It diffuses through cellular membranes at an amazingly fast rate, which is why you can get drunk pretty quickly if you drink fast enough, before anything has been metabolized. Initially, ethanol in the brain stimulates NMDA receptors in the cortex and hippocampus, which stimulates these areas and causes an increase in alpha-wave activity, associated with bodily relaxation. When you drink more, however, the receptors become unresponsive, and ethanol also causes GABA (an inhibitor) to flood certain parts of the brain, especially the hippocampus, which is thought to interfere with memory formation. I believe it is acetaldehyde that damages the liver, however. I'm not so sure about that one, though.
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