Ethereum Virtual Machine (EVM): How It Works and Why It Matters

Have you ever wondered why Ethereum powers far more than simple transactions? From global finance platforms to digital art markets, decentralized organizations, and even Ethereum payments, the network enables systems that operate without banks or intermediaries. What makes this possible is more than just its blockchain—it’s the underlying mechanism that turns Ethereum into a programmable network. In this article, we’ll explore how the In this article, we’ll explore how the Ethereum Virtual Machine (EVM) works, why it matters, and what it means for the future of decentralized applications. works, why it matters, and what it means for the future of decentralized applications.

What Is the Ethereum Virtual Machine (EVM)?

At its core, the Ethereum Virtual Machine (EVM)is a software environment that runs on every Ethereum node. It acts as a global, decentralized computer where programs (smart contracts) run exactly as written.

• Every Ethereum node runs an identical copy of the EVM.
• It ensures that smart contracts and transactions always produce the same result everywhere.
• It is Turing-complete, meaning it can theoretically perform any computation with enough resources.

👉 Think of the EVM as Ethereum’s operating system. Just as Windows or macOS runs software on your computer, the EVM runs smart contracts on the Ethereum blockchain.

Technical Note: Core Architecture of the EVM

• EVM State Model: The EVM separates the world state—which tracks all accounts and their storage at a given time—from the transaction state, which is temporary and changes during execution. This ensures network-wide consistency.
• Stack-Based Design: Instead of registers, the EVM uses a stack of 256-bit words. Each opcode (ADD, MUL, SSTORE, etc.) pushes or pops values, creating a simple, uniform execution model across all nodes.
• ccount & Storage State: Each account holds a balance, a nonce (a transaction counter), contract code, and persistent storage. By contrast, memory is temporary and cleared after each run, making it cheaper but non-permanent.

👉 These features guarantee deterministic execution: identical inputs always yield identical results network-wide.

How the EVM Works?

The Ethereum Virtual Machine (EVM)doesn’t live on a single machine—it runs simultaneously on thousands of Ethereum nodes. Its main job is to process transactions and smart contracts consistently across the network.

How execution works:

1. A user sends a transaction (e.g., deploying or interacting with a contract).
2. The transaction contains code (EVM bytecode) and Tarifas de gas.
3. The EVM executes the code step by step, consuming gas.
4. The blockchain state updates (balances, storage, contract data).

👉 Gas is like the electricity bill of Ethereum. Without gas, no transaction or contract will run.

Technical Note: Gas, Memory, and Storage

• Gas Costs: Every EVM operation consumes gas. Simple arithmetic (e.g., ADD) is cheap, while storage operations are expensive. For example, SSTORE (writing to storage) can cost thousands of gas, whereas SLOAD (reading from storage) is cheaper but still significant.
• Refund Mechanism: If a contract clears storage (e.g., setting a variable back to zero), part of the gas is refunded. This incentivizes developers to clean up unused data.
• Memory vs. Storage: Memory is temporary, reset after each transaction, and cheaper to use. Storage is permanent and written into the blockchain state, but much more costly. Efficient smart contract design often means minimizing writes to storage.

Example: Storage vs. Memory Gas Usage

// SPDX-License-Identifier: MIT
pragma solidity ^0.8.0;

contract GasExample {
    uint256 public storedNumber; // stored in storage (expensive)

    function useStorage(uint256 x) public {
        storedNumber = x; // costs thousands of gas (SSTORE)
    }

    function useMemory(uint256 x) public pure returns (uint256) {
        uint256 temp = x; // stored only in memory (cheap)
        return temp + 1;
    }
}

In this example:

• useStorage() writes a value to contract storage. This triggers the expensive SSTORE operation, which can cost 20,000 gas or more.
• useMemory() only keeps the variable in temporary memory during execution, which is much cheaper and reset after the function call.

👉 Developers often optimize contracts by minimizing storage writes and using memory whenever possible.

Why the EVM Matters?

The Ethereum Virtual Machine (EVM)matters for three reasons:

1. Descentralización – No single authority controls execution; it’s enforced by consensus.
2. Seguridad – Every transaction is verified by thousands of nodes, making fraud nearly impossible.
3. Programabilidad – Developers can build everything from DeFi protocols to NFTs on top of Ethereum.

👉 The reliability of the EVM ensures that contracts and automated processes run exactly as intended—whether for financial transactions, decentralized organizations, or large-scale applications.

⚙️ Technical Note

Execution in the EVM is deterministic. Given the same contract code, inputs, and state, every node in the network will reach the exact same result. This ensures consistency, prevents disputes, and forms the foundation of Ethereum’s trustless design.

Smart Contracts and the EVM

Smart contracts are programs stored on the blockchain. The EVM is the machine that executes them.

Examples of use cases:

• Payments: Release funds only after conditions are met.
• DeFi: Lending, borrowing, or trading with no intermediaries.
• NFTs: Creation and secure transfer of unique digital assets.
• DAOs: Rules for organizations encoded in smart contracts.

👉 A smart contract is like a vending machine: you insert money, press a button, and it delivers the product—no cashier required.

Technical Note: Opcodes and Low-Level Execution

• From Bytecode to Opcodes: When a smart contract is compiled (e.g., from Solidity), it becomes EVM bytecode. The EVM reads this bytecode as a sequence of opcodes—low-level instructions such as ADD, SSTORE, or CALL.
• Step-by-Step Execution: Each opcode interacts with the EVM’s 256-bit stack, memory, and storage. For example, ADD pops two values from the stack and pushes back the result, while SSTORE writes a value permanently to contract storage.
• Error Handling with REVERT: En REVERT opcode allows a transaction to fail safely. Instead of partially applying changes, it rolls back all state modifications to the point before execution began, ensuring atomicity and security.

👉 By analyzing opcodes, developers can optimize contracts for lower gas costs and build stronger safeguards against vulnerabilities.

EVM-Compatible Blockchains

One of the greatest strengths of the Ethereum Virtual Machine (EVM) is that it is not limited to Ethereum itself. Over the years, many other blockchains have adopted EVM compatibility, which means that smart contracts written for Ethereum can often be deployed on these networks with little or no modification.

For developers, this means they can use the same tools—Máscara meta, Remix IDE, Hardhat, Truffle—across multiple ecosystems. For businesses and end users, it means access to more options, faster confirmations, and lower fees, all without having to learn entirely new systems.

EVM-Compatible Blockchains by Category

👉 Key Takeaway:

EVM compatibility allows developers to “write once, deploy anywhere,” making it possible for a single smart contract to run across dozens of networks. This interoperability and tool reuse are among the biggest reasons why the EVM has become the dominant standard in blockchain development.

Comparison of Major EVM-Compatible Blockchains

While security models and architectural categories define how these blockchains operate, businesses and developers also care about practical performance. Speed, transaction fees, and network trade-offs often determine which chain is best suited for specific applications. The following table compares major EVM-compatible blockchains in terms of finality, typical costs, and their key strengths versus limitations.

Limitations of the EVM

Despite its strengths, the Ethereum Virtual Machine (EVM)has limitations:

• Escalabilidad – Transactions per second are limited.
• Gas Fees – Costs can spike during congestion.
• Complejidad – Writing secure contracts is difficult; mistakes can lead to big losses.

Technical Note: Beyond the EVM – eWASM

Ethereum researchers are working on eWASM (Ethereum-flavored WebAssembly), which could eventually replace the EVM.

• Supports more programming languages.
• Offers higher efficiency.
• Could scale Ethereum to handle larger workloads.

For now, the EVM remains the backbone of Ethereum and its ecosystem.

Comparing the EVM with Other Virtual Machines

While the Ethereum Virtual Machine (EVM) dominates today’s smart contract landscape, it is not the only virtual machine powering blockchain ecosystems. Several alternatives offer different trade-offs in speed, scalability, and programming flexibility.

• Solana’s Sealevel VM (SVM): Executes thousands of transactions in parallel, enabling extremely high throughput. Ideal for high-frequency applications like trading. Trade-off: requires powerful hardware and operates with a smaller validator set, reducing decentralization compared to Ethereum.
• Cosmos WASM (CosmWasm): Built on WebAssembly (WASM), allowing developers to write contracts in languages like Rust. Highly modular and interoperable within the Cosmos ecosystem. Trade-off: fragmented liquidity and smaller adoption compared to Ethereum.
• Move VM (Aptos & Sui): Designed around the Move language, emphasizing resource safety and parallel execution. Trade-off: new ecosystem with limited tooling compared to EVM.
• NEAR VM: A WebAssembly-based VM designed for scalability via sharding, supporting multiple languages. Trade-off: smaller DeFi and NFT ecosystems versus Ethereum.
• Parity Substrate / Ink! (Polkadot): A flexible framework that allows developers to build custom blockchains and smart contracts. Trade-off: fragmentation and complexity in cross-chain adoption.
• Cardano Plutus Core: Built on Haskell principles with an extended UTXO model for smart contracts. Offers formal verification for high assurance. Trade-off: more complex to program and slower ecosystem growth.

👉 Each of these alternatives highlights a trade-off: while EVM favors reliability and consistency, others prioritize speed, parallelization, or flexibility—often at the cost of simplicity or adoption.

Real-World Applications of the EVM

• DeFi: Billions of dollars in daily trading rely on EVM contracts for lending, borrowing, and decentralized exchanges.
• NFT Marketplaces: Plataformas como OpenSea depend on ERC standards (ERC-20, ERC-721, ERC-1155) that are enforced consistently by the EVM.
• Cross-Border Payments: Smart contracts automate trustless, borderless transactions with no intermediaries.
• Enterprise Solutions: Supply chains, identity verification, and digital agreements use the EVM for transparency and automation.

⚙️ Technical Note

The EVM’s event and log system is crucial for off-chain applications. Logs emitted during contract execution allow wallets, explorersy dApps to track activity without overloading the blockchain state.

Conclusión

The Ethereum Virtual Machine (EVM) represents a turning point in blockchain history, proving that decentralized networks can go beyond simple transactions to support complex applications. Its design balances security, global consensus, and programmability, creating the foundation for today’s decentralized economy and opening the door for innovations that extend far beyond Ethereum itself.

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