Virtual Machines: The Technology that Powers Systems and Blockchains

What you need to know

• Virtual machines allow multiple operating systems and applications to run simultaneously on a single physical device.
• They are ideal tools for ensuring security when testing unknown software, isolating risky programs, or experimenting with new environments.
• In the blockchain world, virtual machines like the EVM (Ethereum Virtual Machine) are the engine that enables thousands of smart contracts and decentralized applications to operate reliably on global networks.
• Despite their versatility, virtual machines can impact performance, consume additional resources, and add operational complexity.

Introduction: Why do virtual machines exist?

Imagine you need to run Linux on your Windows computer, or test an application that only works on macOS without altering your main system. Virtual machines make this possible by creating isolated environments where different operating systems coexist without conflicts. This technology goes beyond personal computers: in the blockchain universe, virtual machines have become the fundamental infrastructure that supports an entire digital economy of smart contracts and decentralized applications.

Anatomy of a virtual machine

A virtual machine is, in essence, a simulated computer that runs within your physical computer. It does not require additional hardware or changes to your infrastructure. You can install a complete operating system, store data, run programs, and connect to networks, but all of this occurs within a controlled and isolated environment on your host device.

The key component that makes this possible is the hypervisor, a specialized software that acts as an intermediary. Its function is to divide and distribute the actual physical resources (processor, RAM, storage) among multiple virtual machines, allowing them all to share the same hardware efficiently and without interference.

There are two main categories of hypervisors:

Type 1 Hypervisors (Bare-metal): are installed directly on the hardware without relying on a prior operating system. They are common in data centers and cloud platforms, optimized for maximum performance and efficiency.

Type 2 Hypervisors (Hosted): function like normal applications within your current operating system. They are ideal for developers who want to experiment with new technologies without compromising their main environment.

The engine behind virtual machines

The technical operation of a virtual machine depends entirely on how the hypervisor manages the resources. When you activate a virtual machine, the hypervisor allocates a specific portion of CPU, RAM, and storage space. The virtual machine can then operate fully as an independent computer, even though it is actually sharing resources with other virtual machines on the same host.

This mechanism allows a single physical server to host dozens or even hundreds of virtual machines, each running a different operating system and executing completely distinct applications, without one interfering with the other.

Use cases in traditional systems

Safe testing of new operating systems

Experimenting with a different operating system has never been so simple. You can create an isolated environment, install the system you want, and explore without risks. If something goes wrong, you simply delete the virtual machine and return to your intact main system.

Threat containment and potentially harmful software

Did you receive a file from a dubious source? Do you want to install a program that you don't fully trust? Running it inside a virtual machine acts as a security barrier. If the software contains malware or causes issues, the isolated virtual machine contains it, protecting your main system from any harm.

Support for legacy applications

Some business or specialized programs were designed for older operating systems like Windows XP. Virtual machines can recreate those specific environments, allowing you to continue using critical software that would otherwise be incompatible with modern computers.

Multi-platform development and validation

Developers leverage virtual machines to test code on different operating systems simultaneously. This ensures that an application works correctly regardless of which platform the end user utilizes, reducing unpleasant surprises after the launch.

Cloud infrastructure

Most cloud services use virtual machines as a foundation. When you hire a cloud server, you are renting a virtual machine hosted in a remote data center, ready to run your applications, websites, or databases.

Virtual machines in blockchain: the heart of decentralized execution

Virtual machines in blockchain operate under a different principle than traditional virtual machines. While the latter are isolated environments on a computer, blockchain virtual machines are distributed state machines that execute smart contract code consistently across thousands of computers simultaneously throughout a network.

Ethereum Virtual Machine: the industry standard

The Ethereum Virtual Machine (EVM) revolutionized how smart contracts are executed. It allows developers to write code in languages such as Solidity, Vyper, or Yul, which are then compiled to bytecode and executed within the EVM. The crucial point is that every node in the Ethereum network executes exactly the same code in the same way, ensuring that everyone agrees on the outcome.

Many blockchains have adopted EVM compatibility because it makes it easier for existing applications to migrate or launch simultaneously across multiple networks, fostering an interconnected ecosystem.

Diversity of blockchain virtual machines

Not all blockchain networks use the same virtual machine. This diversity reflects different design priorities:

NEAR and Cosmos implement WebAssembly-based virtual machines (WASM), an open standard that allows writing smart contracts in multiple programming languages, increasing accessibility for developers.

Sui uses MoveVM, which executes contracts programmed in Move, a language specifically designed for blockchain applications with an emphasis on security and clarity of resources.

Solana implements its own custom virtual machine (SVM), designed to process massive parallel transactions and handle extremely high volumes of network activity, optimizing for speed above all.

Virtual machines for scalability solutions

In Layer 2 networks designed to accelerate transactions, specialized virtual machines emerge. The zkEVM (zero-knowledge virtual machines) enable zk-rollups to execute smart contracts while maintaining the benefits of zero-knowledge proofs, creating a bridge between scalability and security.

Virtual machines in action: real-world examples

Although invisible, virtual machines work constantly in the background every time you interact with the blockchain:

• DeFi Transactions: when you perform a token swap on a decentralized trading platform, the virtual machine is executing the logic of the smart contract that facilitates the atomic swap, calculates prices, and transfers funds.

• NFTs and digital ownership: the virtual machine continuously runs the code that maintains the immutable record of who owns each non-fungible token. When you buy or transfer an NFT, the virtual machine updates the ownership records.

• Accelerated transactions on Layer 2: if you use a Layer 2 scalability solution, your transactions are processed through specialized virtual machines that optimize for speed and cost, while still maintaining the security of the main network.

Inherent Challenges of Virtual Machines

Performance and resource consumption overload

Virtual machines introduce an additional layer between the code that runs and the physical hardware. This abstraction, while providing security and flexibility, comes at a cost: reduced performance and increased memory and computational power consumption compared to running code directly on hardware.

Operational complexity and maintenance

Maintaining virtual machines, especially in distributed infrastructures or blockchain environments, requires considerable technical expertise. Configuration, upgrades, monitoring, and troubleshooting demand time, specialized tools, and trained personnel.

Compatibility Fragmentation

A smart contract written to execute on the EVM requires significant rewriting or adaptation to function on blockchains that use different virtual machines like Solana's SVM. Developers looking to launch multi-chain applications must invest additional effort in portability and testing, increasing development costs.

Final Reflection

Virtual machines are a fundamental technology in both traditional computing and blockchain ecosystems. In personal computers, they provide flexibility, security, and resource efficiency. In decentralized blockchain networks, they are the mechanism that allows thousands of smart contracts to be executed reliably and consistently across a global network.

Understanding how virtual machines work gives you a better understanding of the invisible infrastructure that supports the decentralized tools and applications you use in the DeFi and Web3 ecosystem.