Ethereum Virtual Machine (EVM) Explained: What Is It and How Does It Work?
The Ethereum Virtual Machine (EVM) is a vital component of the Ethereum blockchain, enabling the execution of smart contracts and decentralized applications (dApps). Understanding EVM and how it works is important for those interested in Ethereum development, blockchain technology, or decentralized finance (DeFi). In this article we will dive deeper into what the EVM is, how it operates, and its significance in the blockchain ecosystem.
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What Is Ethereum Virtual Machine (EVM)?
At its core, the EVM is a virtual machine designed to execute smart contracts. These self-executing contracts facilitate trustless and tamper-resistant transactions, enabling the development of decentralized applications (dApps). Operating as a closed system, the EVM maintains isolation, ensuring security and determinism in contract execution. This design is crucial for preserving the integrity of a blockchain-based global computer.
The EVM uses a concept called “gas” to measure and allocate computational resources. This mechanism promotes efficiency and safeguards the network against potential attacks or resource exhaustion. By assigning a gas cost to each operation, the EVM ensures that resources are used carefully and that contracts do not run indefinitely, which could otherwise disrupt the network.
EVM Architecture
The EVM architecture includes key components such as the stack, memory, storage, and execution environment. The stack manages data during execution, memory stores temporary variables, and storage holds persistent contract data. The execution environment processes transactions through a consensus mechanism, fostering a secure and efficient platform.
Stack
The stack is a last-in, first-out (LIFO) data structure that holds temporary values for contract execution. Each operation in the EVM reads from and writes to the stack, making it essential for managing data during the execution of smart contracts.
Memory
Memory in the EVM is volatile and only exists for the duration of a transaction. It is used to store temporary variables and intermediate computation results. Memory is byte-addressable, allowing for efficient access and manipulation of data.
Storage
Storage is a key-value store that holds persistent data for smart contracts. Unlike memory, storage data remains on the blockchain between transactions. Accessing storage is more costly in terms of gas than accessing memory, reflecting its persistent nature.
Execution Environment
The execution environment ensures that transactions are processed according to the consensus mechanism. It provides the context for executing smart contracts, including information about the current block, transaction sender, and available gas. This environment ensures that contracts run consistently across all Ethereum nodes.
Machine State
The Ethereum state is a comprehensive data structure that tracks accounts and maintains a machine state capable of changing from block to block according to predefined rules. This machine state can execute arbitrary code, with the EVM defining the specific rules for state changes between blocks. This design enables Ethereum to function as a global, decentralized computer, running complex applications and enabling innovative use cases beyond simple value transfers.
Purpose of EVM
Turing Complete Programmable Machine
The EVM is a Turing complete programmable machine, capable of executing scripts to produce arbitrary outcomes. It aims to be a “world computer,” storing data on the blockchain and executing code in smart contracts. The EVM supports the execution of Crypto-contracts written in Solidity, a programming language specifically designed for Ethereum.
Smart Contracts and Automated Execution
Smart contracts on the Ethereum network automatically execute specified actions when certain conditions are met. This functionality is vital for creating programs that facilitate secure and automatic exchanges of money and information. If a condition is not met, the system can trigger an “exit” function, ensuring robust security measures are in place.
Solidity and Smart Contract Development
Solidity is the primary programming language used to write smart contracts on the Ethereum platform. It is a statically-typed language designed for developing smart contracts that run on the EVM. Solidity compiles into EVM bytecode, which the EVM can execute. This language supports various features such as inheritance, libraries, and complex user-defined types, making it versatile for developing a wide range of decentralized applications.
Automated and Trustless Transactions
The EVM facilitates automated and trustless transactions through smart contracts. These contracts are self-executing and enforce the terms written into code. For example, a smart contract can automatically transfer funds from one account to another when certain conditions are met, such as the completion of a task or the expiration of a time period. This automation reduces the need for intermediaries and increases the efficiency and security of transactions.
EVM-Compatible Blockchains
Besides the Ethereum blockchain, several blockchains are EVM-compatible, meaning they use the same standards and protocols as the Ethereum network. Examples include BNB Chain, Polygon, Avalanche, and Fantom. These networks benefit from Ethereum’s extensive ecosystem and development tools, fostering interoperability and innovation.
BNB Chain
BNB Chain, formerly known as Binance Smart Chain, is an EVM-compatible blockchain that supports smart contracts and decentralized applications. It offers lower transaction fees and faster block times compared to Ethereum, making it a popular choice for developers and users.
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Polygon
Polygon, previously known as Matic Network, is a layer-2 scaling solution for Ethereum. It aims to provide faster and cheaper transactions while maintaining compatibility with the Ethereum ecosystem. Polygon’s EVM compatibility allows developers to port their Ethereum-based dApps with minimal changes.
Avalanche
Avalanche is an EVM-compatible blockchain that prioritizes high throughput and low latency. It supports the deployment of Ethereum-compatible smart contracts and dApps, offering an alternative platform with improved performance characteristics.
Fantom
Fantom is another EVM-compatible blockchain that focuses on high performance and scalability. It uses a unique consensus mechanism called Lachesis, which enables fast and secure transactions. Fantom’s compatibility with the EVM allows it to leverage the existing Ethereum ecosystem.
Benefits of EVM
Execute Untrusted Code Securely
The EVM allows the execution of untrusted code without risking data. Its design guarantees that computations do not interfere with other system activities or personal files, ensuring secure and isolated execution environments.
Complex Smart Contracts
The EVM enables the execution of complex smart contracts without concerns about their interactions. Developers can write contracts once and run them on multiple platforms, facilitating the creation of versatile and robust decentralized applications.
Deterministic Processing
Smart contracts on the EVM have access to all of Ethereum’s states at any given time, allowing for deterministic processing. This feature ensures that contracts execute correctly and predictably, providing strong guarantees about their behavior.
Distributed Consensus and Robustness
Ethereum facilitates distributed consensus, where multiple nodes run the same program independently. This setup enhances network robustness, as the system can withstand individual node failures and ensure consistent state across all nodes.
Stateful Contracts
From a developer’s perspective, the EVM simplifies the creation of stateful contracts, which require access to persistent storage. This feature is crucial for developing complex applications that maintain and update data over time.
Downsides of EVM
High Cost of Storing Data
Storing data on the Ethereum blockchain is expensive, with the cost measured in gas. As a result, large-scale data storage can become prohibitively costly.
Gas Costs and Network Congestion
All transactions on Ethereum require gas fees, paid in ETH tokens. These fees vary based on transaction complexity and network congestion. During high traffic periods, gas prices can rise significantly, making transactions more expensive and slower.
Technical Expertise Required
Writing smart contracts and using the EVM requires technical expertise. While the EVM’s Turing-complete nature allows for versatile programming, it also demands a deep understanding of coding practices and potential security vulnerabilities. This complexity can be a barrier for new developers.
Conclusion
The Ethereum Virtual Machine is a pivotal component of the Ethereum blockchain, providing the foundation for smart contracts and decentralized applications. Its architecture and design enable secure, efficient, and versatile execution of code, fostering innovation in the blockchain space. Despite its benefits, the EVM also presents challenges, such as high gas costs and the need for technical expertise. Understanding the EVM is crucial for anyone involved in blockchain development, as it underpins the functionality and potential of the Ethereum network and its compatible blockchains.
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