I’ve recently been reconsidering a technical issue that many people find confusing—what is the EVM? Honestly, if you want to truly understand how Web3 works, you must understand this.

Starting with Bitcoin. Bitcoin is essentially a ledger that records who owns how much money. But Ethereum’s ambitions are much greater; it aims to become a "world computer." If Ethereum is a globally decentralized computing network, then the EVM (Ethereum Virtual Machine) is the CPU and operating system of that computer.

When you use Windows or macOS, the operating system bridges the hardware and software. The EVM does exactly the same thing, but it serves DApps and smart contracts. Developers write Solidity code to define financial logic, and the EVM reads, processes, and executes it precisely, all without human intervention.

More importantly, the EVM also maintains the entire network’s "state." Every time a new block is added to the blockchain, the EVM calculates the results of thousands of smart contract interactions, updating each wallet, each contract’s balance, and ownership records. That’s why it’s called a "state machine."

Why is it called a virtual machine? Because it doesn’t exist in the physical hardware of a data center. The EVM is a software environment run simultaneously by thousands of independent nodes worldwide. Each node runs its own copy of the EVM, processing exactly the same data and arriving at the same mathematical conclusions. This is why Ethereum is nearly impossible to hack or manipulate.

Regarding execution, there’s a clever three-step translation process. First, developers write code in high-level languages like Solidity or Vyper—easy for humans to read, write, and audit, but the EVM cannot understand it. Then, compilers turn this code into bytecode, a string of hexadecimal characters, which is the native language of the EVM. Finally, when users interact with smart contracts, the EVM breaks down the bytecode into over 140 operation codes (Opcodes), like ADD, SUBTRACT, STORE, and executes them step by step.

Here’s a design many overlook—the Gas mechanism. Each opcode has a clear Gas cost. Simple transactions (like transferring ETH) cost very little Gas, while complex DeFi operations cost much more. Gas may seem like a pure tax, but it’s actually a security layer for the EVM, solving two core problems: preventing malicious code from entering infinite loops that could crash the network, and compensating node operators for their computational resources.

On EVM compatibility, this has been one of the smartest solutions in recent years. When the Ethereum mainnet became congested and fees skyrocketed, many new chains emerged. But how do you convince developers to build on your new chain? The answer is EVM compatibility—copying Ethereum’s virtual machine into your network architecture. This way, developers can "write once, deploy anywhere," and move DApps from Ethereum to faster, cheaper EVM-compatible chains within minutes.

Currently, most of the total value locked (TVL) is on EVM-compatible networks—BNB Chain, Avalanche, Fantom, these Layer-1s, as well as Layer-2s like Arbitrum, Optimism, Polygon, Base.

But there are opponents. Chains like Solana, Aptos, Sui deliberately avoid EVM, instead building entirely new virtual machines with languages like Rust or Move, aiming for maximum speed. It’s a trade-off—EVM’s ecosystem is large and standardized, with rich developer tools, but performance is limited; non-EVM chains are faster, but have smaller developer ecosystems and steeper learning curves.

Looking ahead, the EVM currently faces a clear bottleneck—single-threaded sequential execution. Imagine a supermarket with only one checkout counter, with thousands of customers in line. Even if your shopping is unrelated to the person in front, you still have to wait. During bull markets, this single channel becomes severely congested, forcing users to pay exorbitant fees to get ahead.

The breakthrough is parallel EVM. Network nodes are programmed to scan transactions and identify which are completely unrelated. For example, user A buying an NFT on OpenSea and user B trading different tokens on Uniswap don’t affect each other’s "state," so parallel EVM can process them simultaneously. Historically, if you needed parallel execution and ultra-fast performance, you had to completely leave the EVM ecosystem and use Solana. But now, new networks like Monad and Sei are successfully building parallel EVMs.

In summary, the EVM transforms blockchain from a simple financial ledger into a globally distributed "world computer." EVM compatibility standardizes smart contract deployment, laying the foundation for today’s thriving multichain universe. As innovations like parallel EVM continue to address scalability issues, the EVM computational standard will remain at the core of decentralized finance. Understanding the EVM will make you a sharper investor, allowing you to go beyond speculative tokens and evaluate the actual infrastructure driving the future of the internet.