How Does an Ethereum Virtual Machine (EVM) Work?

What is EVM?

EVM stands for Etherium virtual machine, and that's basically the software based microprocessor that the Ethereum blockchain uses when you hear people talking about smart contracts.

The EVM’s physical instantiation can’t be described in the same way that one might point to a cloud or an ocean wave, but it does exist as one single entity maintained by thousands of connected computers running an Ethereum client.

The Ethereum protocol itself exists solely for the purpose of keeping the continuous, uninterrupted, and immutable operation of this special state machine; It's the environment in which all Ethereum accounts and smart contracts live. At any given block in the chain, Ethereum has one and only one 'canonical' state, and the EVM is what defines the rules for computing a new valid state from block to block

[kapilsaxena]

Thank you, Ivan, for sharing your skills like this. Without a doubt, this is the best explanation I've heard. I've held ethereum for a few years even though I never really could grasp anything. Just too old, I guess, but this time I got it!!!