What is an Ethereum Virtual Machine and why is it important?
In my Ethereum scaling series, we extensively discussed the importance of making the Ethereum blockchain more scalable, efficient, and secure. We have established that a blockchain should be capable of processing thousands of transactions simultaneously and at a low cost.
As blockchain technology continues to be adopted, there has been a lot of discussion regarding the significance of interoperability between currently siloed blockchains. The importance of interoperability and its benefits have been well-documented over time. Interoperable smart contracts offer immense possibilities, allowing industries such as healthcare and law to utilize the technology to communicate sensitive information between private and public networks in a controllable manner. The average crypto user's experience stands to improve dramatically with multi-token transactions and multi-token wallet systems, resulting in more streamlined interactions with dApps. The DeFi experience would be significantly improved, as it is currently the largest use case for cryptocurrencies.
Although the future seems promising, most Layer-1 blockchains today lack the necessary features to support cross-blockchain interoperability. Virtual Machines (VMs) play a significant role in the future of interoperability. Let's dive into it...
Virtual Machines
Before we proceed, let's take a moment to lay a general foundation for virtual machines.
Physical machines are essentially hardware components that run on computers, such as the popular M2 processor by Apple. These physical machines perform tasks based on their interpretation of binary opcode, which essentially consists of ones and zeros.
Virtual machines operate in a similar manner, executing tasks based on opcodes. The key difference is that virtual machines are not tied to any specific physical hardware, making them platform agnostic. This enables compatibility across a wide range of systems.
Ethereum Virtual Machine (EVM)
The Ethereum Virtual Machine is a runtime environment specifically designed to execute smart contracts on the Ethereum blockchain. Perhaps more well-known is the Java Virtual Machine, where developers code in the Java language that compiles to Java bytecode, which is then executed by the Java virtual machine. The Ethereum Virtual Machine operates in a similar fashion, with the only difference being that the programming language of choice is Solidity, rather than Java.
Why is this important?
The EVM's ability to run on multiple hardware platforms and operating systems, regardless of the underlying infrastructure, plays a significant role in enabling decentralization, a core pillar of Ethereum. There is no limit to the number of platforms that can run the EVM. Furthermore, the EVM empowers users to execute any arbitrary code on a blockchain. Without this capability, a new blockchain with custom logic would have to be created every time a new dApp is built. With the creation of the EVM, we now have access to a completely virtual runtime execution environment for processing smart contract transactions, which is globally accessible, allowing anyone with any hardware to easily run this virtual machine. As a result, developers can seamlessly integrate their dApps into different platforms using a programming language they are already familiar with (Solidity).
How does it actually work?
So far in this article, we have established that the EVM is designed to process smart contract transactions. Solidity is a high-level programming language understood by developers but not by the EVM itself. The EVM works by first translating the Solidity code into low-level instructions that it can comprehend, which are referred to as Opcodes. This translation is necessary in order to execute simple tasks such as token swaps.
It is important to note that for every smart contract operation to be executed, a transaction fee must be paid in the form of gas. Every code execution carries a gas fee, which varies depending on factors such as the complexity of the operation and network-wide demand.
Pros and Cons of EVM
The EVM is extremely powerful for developers as it allows them to run complex smart contracts in different computing environments with distributed consensus. Consequently, if a single node fails, the overall dApp can still run unaffected since the EVM code is the same across all participating nodes. Furthermore, since account data is held across all participating blockchain nodes, it is great for writing custom smart contracts and creating unique dApps that can access this distributed dataset and produce reliable outputs.
However, the EVM also comes with potential setbacks. Since every line of code written in Solidity requires a certain amount of gas to be executed, developers need to keep this in mind as fees can quickly become expensive. This gas fee problem becomes even more significant when additional computation requirements for more complex dApps are factored in. Another potential hurdle is that developers must have a firm understanding of Solidity as a programming language in order to create efficient smart contracts.
Final Thoughts
The positive impact of the EVM on the development of the broader blockchain ecosystem is undeniable. As the theme of interoperability continues to be at the forefront for developers, an increasing number of EVM-friendly blockchains have emerged, each with varying levels of adoption. At their core, these newer blockchains can interact with Ethereum users by leveraging blockchain bridges.
It is interesting to note that the Ethereum 2.0 roadmap calls for a shift from the EVM to eWASM. WebAssembly may very well be the future of dApp development, as the proposed solution is extremely modular and platform-independent. This ultimately means that a significantly higher number of transactions can be processed. Additionally, eWASM supports more traditional languages, such as Rust, C, and C++. eWASM also comes with a more extensive set of tools compared to the EVM. In conclusion, whether eWASM replaces the EVM is a question that will be answered in due time.
If you are an investor or builder in this space and would like to connect, feel free to reach out to me at Ernest@Boldstart.vc or on Twitter @ErnestAddison21.