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Why wasn't JVM and Java used for Ethereum? But instead, EVM and Solidity was invented for the express purpose for Ethereum?

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You can read some of the design rational behind the EVM choice here.

Given this choice, you need a special language and compiler because optimizations from now on must be done for the gas (and not for CPU cycles), so this is vastly different than say a Java compiler.

And it's almost always better to start off with a custom language that fits business needs. This is the case in the CG industry too where you have RSL, OSL or HLSL shading languages to drive renderers (RSL for rasterizers like old RenderMan, OSL for physically based pathtracers and HLSL for things like games, so there is even more specialization...).

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