EVM (Ethereum Virtual Machine)
In short: The EVM, or Ethereum Virtual Machine, is the computational engine of Ethereum: the environment in which smart contracts run.
The EVM, or Ethereum Virtual Machine, is the computational engine of Ethereum: the environment in which smart contracts run. Every node executes the same code with the same inputs and must arrive at the same result.
Why it matters
Developers write contracts in languages such as Solidity, which are compiled into EVM bytecode and deployed to the blockchain. Each operation the EVM performs has a gas cost, which stops endless loops and makes users pay for the computing work they request. Because the EVM became a de facto standard, many other blockchains, such as BNB Smart Chain and the Avalanche C-Chain, are EVM-compatible: the same contracts, wallets and tools work across them, and an address usually has the same format on each.
Example
When a user swaps tokens on a decentralized exchange, their wallet sends a transaction that calls a smart contract. Every Ethereum node runs that contract's bytecode in the EVM, step by step, and updates the token balances. If the transaction runs out of gas before it finishes, the EVM reverts all of its changes, but the gas already used is still paid.