In the past the Ethereum (ETH) network made a breakthrough in the blockchain industry. It was created as a full-fledged multifunctional system of smart contracts that underlie a variety of decentralized applications (DApps). This new network space provides developers with an opportunity to implement new ideas and technological solutions. All this would not be possible without the Ethereum Virtual Machine or EVM.
What is EVM?
Ethereum Virtual Machine (EVM) is a virtual software computing environment within which smart contracts and DApps are created. We can call it the "heart of Ethereum". In simple terms, it is a huge powerful computer that monitors the execution of the Ethereum network algorithms, regulates the operation of the blockchain and is responsible for distributing and storing data in the network. The main programming language used in the Ethereum Virtual Machine is Solidity.
For the first time the information about the Ethereum Virtual Machine appeared in 2015. The co-founder of the Ethereum blockchain, and the creator of Polkadot (DOT) and Kusama (KSM) Gavin Wood, wrote about it in the Yellow Paper. In it, a British programmer, scientist and analyst gave a complete technical description of his new development, and told about the concept of creating a new machine.
Ethereum Virtual Machine includes all existing accounts and balances. When a new data block is added, the system updates according to the established set of rules. Theoretically, the EVM can perform computational operations of any length and complexity – it is considered a quasi Turing-complete machine. In reality, the system has a number of limitations, primarily based on the supply of computing resources.
The internal currency of the EVM is "gas" (gwei). It serves as payment for the execution of smart contracts, and it includes the cost of ongoing transactions. The fee depends on the amount of gas spent, the complexity of the calculations, and the load of the Ethereum network at a given time. During periods of high network activity, the cost of gas might reach $20 in ETH.
The gas also performs protective functions within the network. It helps to recognise hacker attacks on the blockchain and blocks them.
Where is the EVM used today?
Not only Ethereum network uses EVM technology:
- Ethereum Classic (ETC). Crypto platform for the development of decentralized applications and smart contracts based on Proof-of-Work consensus algorithms.
- Polygon (MATIC). A network of blockchains and protocols created to increase the scalability of Ethereum.
- VeChain (VET). Blockchain platform integrated into the business industry. VeChain solutions are used for supply chain management and counterfeiting.
- Fantom (FTM). Korean decentralized smart contract platform.
Pros and cons of EVM
The main advantages of the Ethereum Virtual Machine are:
- free access to create your own DApps. Any network user with programming skills can create their own decentralized application;
- grants the limitless potential of smart contracts. A good example of recent technological innovations in this environment is NFT. They first appeared in 2015 and proved that digital art has a right to exist and can be freely sold on decentralized markets.
The Ethereum Virtual Machine is constantly developing and improving, because for now this system has a number of disadvantages:
- high cost of data storage;
- low scalability;
- high cost of gas during periods of high activity on the network;
- a number of restrictions for creating smart contracts;
- a complex interface, which requires a certain technical knowledge base.
To solve all the above problems, sidechains and second-level solutions based on Rollups technology are being actively developed.
Due to the EVM technological environment, smart contracts appeared and became a base for ERC-20 tokens, NFTs, DAOs, DAps, DeFi projects, as well as decentralized exchanges (for example, Uniswap).
In the near future, the founders of Ethereum envision the transformation of the Ethereum Virtual Machine into Ethereum WebAssembly (eWASM), which will increase the speed of operations, add programming languages such as C, C ++ and Rust to the development of contracts. All this is tied to the transition of the Ethereum blockchain to the new Proof-of-Stake consensus algorithm and the release of the long-awaited Ethereum 2.0.
If you want to learn more interesting facts about crypto then check out our blog! You might like our article “The Ethereum Merge”.