The Ethereum network was launched in 2015. It was authored by (then 19-year-old) Vitalik Buterin and co-founders such as Gavin Wood, Charles Hoskinson, Joseph Lubin and Anthony Di Iorio. It has introduced many innovations to the blockchain landscape, becoming the second most popular cryptocurrency. It runs EVM – Ethereum Virtual Machine, which makes this network one of the most popular choices among Web3 developers. How does EVM work, and what are its benefits? Find out in the article.

EVM – definition and the way it works

EVM is a layer of abstraction between code and machine that runs virtually but can be supported by different devices. It uses decentralised memory to execute smart contracts, i.e., contracts that execute automatically when certain conditions are met, giving users a guarantee of receiving the provisions in them, such as, e.g. transferring funds to a specific address. As a result, the Ethereum network does not require the involvement of third parties. The Ethereum Virtual Machine processes changes in the network state related to the execution of smart contracts. Note that the EVM does not execute these directly but rather through so-called opcodes, which are complex, low-level instructions. The EVM also serves as a runtime environment for decentralised applications (Dapps). 

To ensure that the network does not become looped due to the EVM, gas is utilized within the network. This is a unit of computation used to run smart contracts, transfer funds or mint NFTs, among other things. The Ethereum Virtual Machine will perform calculations for as long as there is sufficient gas. This is why more complex operations require higher costs. 

What characterises the EVM? 

The operation of an EVM is characterised by Turing completeness, which means that a program can be run, but it is limited by the computing power. Ethereum Virtual Machine also means deterministic execution – given the same initial state and input data, every node on Ethereum will receive exactly the same result from executing a smart contract or performing a transaction. EVM is also secure – it isolates code execution in a separate environment, preventing network disruption. The smart contract code is immutable, which is fundamental to the operation of the network. Computing within EVM is global – the computing power of all nodes that operate within the network can be used, preventing single points of failure. If one node stops working, the others will continue to perform. 

Conclusion – what limits EVM?

The Ethereum Virtual Machine is a solution that makes the network a 'tool for creating tools'. Its operation makes Ethereum the second-largest network in the world in terms of capitalisation, which is widely used in emerging projects. The EVM's main problem, however, is the time and cost of executing smart contracts. There are other EVM-based networks on the market, such as Avalanche and Polygon, which are much faster. The biggest challenge facing Ethereum is to increase scalability and reduce costs, which, combined with the network's strong reputation, will allow it to grow continually. However, despite its problems, EVM remains a great innovation that is paving the way for networks to be as much a part of the digital future as possible.