Demystifying Ethereum Virtual Machine (EVM) and EVM Chains
As crypto investors research new projects/tokens to invest in, they will soon enough come across the term “EVM-compatible.” What does this mean and what’s the big deal?
Ethereum is one of the leading platforms in the world of blockchain technology. At the core of Ethereum’s functionality lies the Ethereum Virtual Machine (EVM), a crucial concept for understanding how this blockchain network operates.
In this article, we will delve into what the Ethereum Virtual Machine is, what it does, how it works, and why EVM-compatibility is so important for the Ethereum ecosystem.
What is the Ethereum Virtual Machine (EVM)?
The Ethereum Virtual Machine (EVM) is the decentralized, global computer that powers the Ethereum network. It is a fundamental component that enables smart contracts, decentralized applications (DApps), and the execution of transactions on the Ethereum blockchain.
A comparable element in existing computing structures to explain Ethereum’s Ethereum Virtual Machine (EVM) is a “runtime environment” or “interpreter” for a specific programming language.
Just as in traditional computing, you have runtime environments like the Java Virtual Machine (JVM) for Java, the Common Language Runtime (CLR) for .NET languages, or the Python interpreter for Python, the EVM serves as a runtime environment within the Ethereum network. The function of these runtime environments is to execute code written in their respective programming languages.
In the EVM, smart contracts written in Solidity (and other compatible languages) are executed. Likewise, in the JVM, Java bytecode is executed; in the CLR, Common Intermediate Language (CIL) code is executed; and in Python, Python code is interpreted and executed.
The EVM provides isolation for executing smart contracts, making sure that they don’t interfere with each other. Similarly, runtime environments isolate and manage the execution of different programs or code segments, preventing them from causing conflicts.
Key Elements of the EVM
To understand the EVM, it’s essential to grasp the following key points:
- Decentralized computer: The EVM acts as a computer distributed across thousands of nodes (computers) around the world, making it tamper-resistant and censorship-resistant.
- Smart contracts: The EVM allows for the creation and execution of smart contracts, which are self-executing agreements with predefined rules and conditions.
- Gas: To perform operations on the EVM, users need to pay in ether (the native cryptocurrency of Ethereum) as gas. Gas fees ensure that computational resources are allocated fairly.
How does the Ethereum Virtual Machine work? (Technical)
The EVM operates on a set of principles that are crucial to its functionality:
- Deterministic execution: Every operation on the EVM is deterministic, meaning that given the same inputs, the results will always be the same. This ensures that the network remains secure and predictable.
- State and transactions: The EVM maintains a global state, which represents the current state of the Ethereum network, including account balances and contract storage. Transactions, which are signed instructions from users, modify this state when executed.
- Mining and consensus: Since transitioning to a new consensus mechanism in 2022, Ethereum’s new proof-of-stake model replaces miners with validators, who are chosen to create new blocks and validate transactions based on the amount of cryptocurrency they hold and are willing to “stake” as collateral. Validators are incentivized to act honestly, as they can lose their staked assets if they behave maliciously.
- EVM Bytecode: Smart contracts and transactions are written in a low-level programming language called bytecode. The EVM reads and executes these bytecode instructions.
- Gas Limit: Each block has a gas limit, which determines the maximum amount of computational work that can be done in a block. This ensures that the network doesn’t become congested or overburdened.
What does EVM-compatible mean?
EVM-compatibility refers to the ability of a blockchain or a network to mimic the functionality of the Ethereum Virtual Machine. When a blockchain is EVM-compatible, it means that it can execute smart contracts and DApps developed for Ethereum. This interoperability allows developers to write code once and deploy it on multiple EVM-compatible chains, expanding the reach of their applications.
The concept of EVM-compatibility is essential for the growth of the blockchain ecosystem as it enables developers to leverage their existing knowledge of Ethereum and create applications that can be used on multiple platforms. Notable EVM-compatible chains include Polygon, Avalanche, Binance Smart Chain, and many others.
What are EVM Chains?
EVM Chains, often referred to as Layer 2 solutions, are blockchain networks that run parallel to the Ethereum mainnet and are designed to alleviate some of its limitations, particularly scalability and high transaction fees. These chains inherit the EVM’s capabilities, allowing developers to deploy smart contracts and DApps while benefiting from faster transaction processing and lower costs.
The most common types of EVM chains include:
- Sidechains: These are independent blockchains that are connected to the Ethereum mainnet. They can handle specific tasks or operations while interacting with the Ethereum network for security and settlement.
- Layer 2 solutions: These are scaling solutions built on top of the Ethereum network, such as Optimistic Rollups and zk-Rollups. They aim to reduce congestion and fees on the Ethereum network by processing a large number of transactions off-chain and then settling them on the mainnet.
EVM Chains are a crucial component of the Ethereum ecosystem’s evolution, providing scalability and flexibility to meet the increasing demands of users and developers.
Conclusion
The Ethereum Virtual Machine (EVM) is the heart of the Ethereum blockchain, enabling smart contracts and decentralized applications to function seamlessly. EVM-compatibility allows for interoperability between different blockchain networks, while EVM Chains offer solutions to scalability and high transaction fees. Understanding these concepts is vital for anyone looking to explore the world of blockchain and cryptocurrencies, as they underpin much of the innovation and development in this space.
