What is the Ethereum Virtual Machine (EVM)?

What is the use of an EVM?

The use and purpose of an EVM is to determine the state of all blocks on the Ethereum Blockchain. Apart from maintaining a database of all transactions and accounts, it has a second layer to enable the development of smart contracts — defined as a “distributed state machine.” In other words, an EVM maintains a database of all accounts and balances. At the same time, it executes machine code and changes each block added to the blockchain based on a specific set of rules. The EVM defines the state of the machine.

How does an EVM work?

To understand how an EVM works, it is important to know how a Virtual Machine operates. They are created on top of an operating system, such as Windows or IOS, and work like a physical computing machine. They can work with different operating systems and hardware, thus functioning as an engine for a decentralized ecosystem. Thanks to a VM, all network participants can use computing power and resources, regardless of their geographic location, to develop dApps and execute smart contracts in a decentralized manner. Anyone can access the EVM from anywhere in the world through an Ethereum Node on the network. Lending computing power to the network is incentivized and fairly governed.

Smart Contracts & dApps

Smart contracts are agreements between individuals in code form. When specific parameters (dictated in the smart contract) are met, it is executed immediately, thus removing the need for a third party to validate the agreement. Smart contracts must run on multiple nodes or in a network to be immutable. This means they run on an EVM for them not to be compromised.

What Are EVM-Compatible Blockchains?

In 2021 gas prices on Ethereum skyrocketed to levels where users were priced out of using dApps such as Uniswap. This was caused by the current Ethereum configuration in which the transaction throughput is around 15 transactions per second, meaning that given the high demand, the network was congested by transactions, meaning users had to pay a high amount of Gas in ETH so they could be processed.

Closing Thoughts

Economies created by ecosystems of smart contracts such as Ethereum are at a very early stage. With new use cases emerging in Web 3.0, such as Gamefi, where games create economies by issuing new tokens and creating yield farming opportunities, high computing power will be needed to host dApps with high transaction volumes. Even EVMs will need scalability solutions when they are widely adopted, which is why the Cross-Chain Bridge contributes to a multichain future where different blockchains can communicate and transfer value seamlessly in the form of tokens and NFTs.



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