Ethereum Virtual Machine: Facts and Functionality

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23 Jan 2024

If you have been exploring the crypto space for a while, you might have stumbled upon the term EVM, the acronym for Ethereum Virtual Machine.
It’s a blunder that many people make when they use the words “ETH” and “Ethereum” interchangeably. There is a distinction between the two terms: ETH is a cryptocurrency, and Ethereum is a blockchain network that focuses on smart contracts.

If you’re unfamiliar with blockchains and find this fact difficult to comprehend, learning about Ethereum and the Ethereum Virtual Machine is a good place to start with.

What is an Ethereum Virtual Machine (EVM)?

The Ethereum Virtual Machine (EVM) is the core part of the Ethereum network that handles smart contract deployment and execution. The Ethereum Virtual Machine acts as the software virtual stack that executes contract bytecode and is integrated into each entire Ethereum code.
Understand it like this: the EVM running on the Ethereum Blockchain can be imagined as a global decentralized computer containing millions of executable programs, each with its own permanent data store.

Also, the Ethereum Virtual Machine is Turing complete, which means it can perform any logical step in a computational function. To understand how Ethereum Virtual Machine (EVM) works, you must be prepared with the prerequisites to dive deeper.

Prerequisites to Understand Ethereum Virtual Machine

When we talk about Ethereum Virtual Machine (EVM), it becomes important to understand the concept of smart contracts, Turing-complete machines, and virtual machines. This way you will develop an understanding of how decentralized ecosystems work.
The powerful and complex blockchains are truly breaking into the mainstream, transforming different industries. This directly points to the global significance of Web3 and a decentralized web. So, read on to know the specifics of Ethereum Virtual Machine (EVM) and how this decentralized ecosystem actually works.

How does EVM use Smart Contracts?

Smart contracts are pieces of computer codes that run on the blockchain and act as an agreement between two entities. Simply put, smart contracts are programs that operate on the blockchain.
So how is Ethereum Virtual Machine (EVM) related to smart contracts? Well, they both are inseparably intertwined and one can not exist without the other when it comes to the Ethereum Blockchain.
Smart contracts are usually written in high-level languages like Solidity and then compiled into EVM bytecode. EVM cannot directly execute smart contract languages like Solidity. Instead, they are compiled into low-level machine instructions called opcodes.
In the following sections of this article, more will be said about how this concept comes into reality. For now, let’s understand what virtual machines are to later define Ethereum virtual machines comprehensively.

What are Virtual Machines?

Virtual machines simply add a layer of abstraction between the machine and the code that is being executed. The virtual machine layer is required to ensure that applications are separated from one another and their host as well as to enhance the portability of software.
Virtual machines aren’t confined to a specific physical device and have no hardware or system interface. It uses the computing power of many participants to offer a runtime environment replicating a physical computer.
However virtual machines are not tied to a single operating system or location. It can be accessed from anywhere in the world regardless of where you live or what kind of computer you use.
Combining all these facts, virtual machines are a perfect engine for a decentralized ecosystem. Hence, we have the Ethereum Virtual Machine that acts like a global processor or computer that lends its accumulated computing power to developers.
The developers then use the EVM to create smart contracts and decentralized apps or dApps. Before we get into how the Ethereum Virtual Machine works, you need to understand the essential component of the process which is Turing-completeness.

Is EVM Turing-complete?

Turing-complete is an essential theory that Ethereum Virtual Machine operates on. The EVM is Turing complete which means it works as a hypothetical machine that embodies the concept of non-human or machine thinking.
The thinking process is executed by way of an algorithm. As such, EVM processes a string of symbols or functions that can be moved backward and forward. One could also imagine a read/write head that would move between these functions. There is no defined limit to such a string and can be hypothetically infinite, only constrained by physical limitations.
Memory can be infinitely added by adding to the length of the string. Thus, the computer has to follow a set of instructions. This concept is the medium to answer what is the purpose of the Ethereum Virtual Machine.
Let’s move on to the core topic at hand, how the Ethereum Virtual Machine works.

Also Read: All About Ethereum Staking

How Does the Ethereum Virtual Machine Work?

The Ethereum Virtual Machine determines what the overall state of Ethereum will be for each block in the blockchain. The EVM enables anybody to run code in a trustless ecosystem where the outcome of execution may be guaranteed and is completely predictable.
When a transaction takes place, it causes the smart contract to execute. Consequently, the EVM changes Ethereum’s state to meet the needs of the contract call. The EVM’s potential to interpret and execute smart contracts during transactions sets Ethereum apart from simpler blockchains like Bitcoin.
EVM works its way to update to a new valid state from block to block in response to smart contract data.
The Ethereum Virtual Machine keeps track of smart contract execution costs which is an associated cost in Gas units to each instruction implemented on the EVM.

Benefits of Ethereum Virtual Machine

Here are some of the benefits of the Ethereum Virtual Machine (EVM), which has the following use-cases and utilities.

Ethereum Virtual Machine allows anyone to develop their decentralized application. Hence, there are no security barriers or restrictions.
Ethereum Virtual Machine is widely used to create NFTs. The NFT space is rapidly evolving and getting a lot of popularity in the crypto market. These NFTs are minted with the help of EVMs which adds an important use case of this system.
By tapping into the power of the Ethereum Virtual Machine, you can create so many things such as events, file-sharing economies, markets, new ways of trustless interaction, and new infrastructures for finance.

Drawbacks Of Ethereum Virtual Machine

Though the Ethereum Virtual Machine (EVM) has proved to be a core system of the Ethereum network, the following are some drawbacks to how it functions.

EVM is perceived as a decentralized network, which isn’t true. It is not completely decentralized as the majority of Ethereum Nodes are housed on Amazon Web Services, centralized cloud servers.
If the service providers decide they don’t like Ethereum for any reason, the nodes might simply shut down, causing the network to collapse. This case has happened before with some social networking applications.
EVM requires some technical expertise and is limited to those who know how to code.
During network congestion, there are high gas expenses which is a significant disadvantage for Ethereum users. While individuals making big transactions would not face any issues, those sending smaller transactions may be unable to access the network for some time.
When a large number of users engage with the DApps’ smart contracts and make a large number of transactions, the network might slow down and even cease operation due to very high gas prices.

Also Read: Whats is Ethereum Governance Mechanism?

The Final Word
Ethereum Virtual Machine is an incredible system to create decentralized versions of various business models. Even though using smart contracts to connect with the EVM is more expensive than executing applications, there are numerous use cases where decentralization is preferred.

Source:
https://www.cryptotimes.io/ethereum-virtual-machine/