What is the Ethereum Virtual Machine (EVM)?

Cross-Chain Bridge
5 min readSep 2, 2022

The Ethereum Virtual Machine EVM is a vital part of the Ethereum Ecosystem, where developers create and run smart contracts and dApps in the “Solidity” programming language.

Bitcoin relies on distributed ledger technology to maintain a database of transactions between different accounts. Ethereum has been developed to allow decentralized transactions and also host and run Smart Contracts using distributed state machine technology which includes a specific set of rules to build decentralized applications (dApps) — such as Uniswap (a decentralized exchange) or OpenSea (an NFT Marketplace).

To understand what an EVM is — and Ethereum in general — it is necessary to understand concepts related to blockchain technology, such as proof of work and hash functions, and know about bytes and stacks. In this article, we will explore the purpose of an EVM, how it works, and how it works as a vital piece of the development and progress of Web 3.0.

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.

The primary purpose of an EVM serves to move the internet away from an information network managed by a few authoritarian companies that disproportionately distribute value to an internet that redeploys and redistributes value for greater access and security through the world’s decentralized computer — such as Ethereum. From DeFi Apps to NFT Marketplaces like OpenSea or Crypto Games and Metaverses, developers use the EVM to develop the dApps mentioned above on the Ethereum Network using the Solidity programming language.

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.

Nodes in the Network have to agree to execute instructions, making the EVM Turing complete, which means that it can execute computational functions with a certain logic. To run the instructions of a smart contract, the EVM assigns a cost for their execution. In Ethereum, these are measured in units of Gas and are paid with the cryptocurrency, ETH. This creates an economy that is governed in a decentralized way by the world’s virtual computer, making possible the development of Web 3.0 — the internet of value.

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.

Beyond smart contracts, dApps are simply a set of self-executing smart contracts which are part of an application with its own interface to serve a specific purpose, for example, a decentralized exchange that uses liquidity pools to offer swaps between different cryptocurrencies, such as Uniswap. Just as Web 2.0 has various applications such as Airbnb or Spotify, Web 3.0 relies on an EVM to run similar applications in a decentralized way and contribute to an internet where value is distributed proportionally to all network participants, making it possible for these agreements to self-execute without the need for a central authority to regulate them.

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.

That is why different developers created blockchains such as BNB Smart Chain or Avalanche and even solutions to scale Ethereum by making a layer on top (Layer 2), such as Polygon, which decongests Ethereum transactions but still uses this as the settlement layer. To facilitate the migration of dApps to other Blockchains, they offer EVM compatibility, i.e., they mirror a similar EVM code environment so that developers do not have to develop smart contracts or dApps from scratch and can execute them immediately.

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.

Enjoy a multichain future by joining our Discord Server and experience the Cross-Chain Bridge technology transferring assets between major EVM blockchains.

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