The State of the Ethereum Network – 2018
Blockchain technology — and Ethereum in particular — has gained international attention and traction since its release in 2015. In particular, late 2017 and early 2018 saw a massive increase in popular attention due to rapid price increases across the entire crypto-asset ecosystem. In two years, the word “Ethereum” has been included in over 110 million Google searches. The hashtag #ethereum is tweeted, on average, 20,000 times a day.
But what has this gradual and acute increase in attention meant for the Ethereum network as a whole? If we pull back the curtain of the much-discussed price of ether, what is happening on the Ethereum network? Let’s take a look.
Looking at the Figures: Blockchain Activity
Since its inception, the network has processed nearly 240 million transactions. At its height on January 4, the network processed 1.3 million transactions in 24 hours.
The network is huge and distributed. To date, 35 million unique addresses exist on the Ethereum blockchain. On January 4, 2018, the number of active (i.e. transacting) addresses on Ethereum surpassed 1 million for the first time. On January 4, 2018 over 350,000 new addresses were created — the most addresses generated within a 24 hour period to date. Ethernodes reports just under 17,000 nodes running the Ethereum blockchain across six continents, making it the most decentralized blockchain platform in existence.
The Ethereum blockchain is, without a doubt, the most active smart contract platform in existence. Of the top 100 tokens by market cap, 94% are built on top of Ethereum. Of the top 800 tokens, 87% are built on Ethereum. Most of these tokens are “ERC-20 tokens,” which made possible the majority of the $5.5 billion raised through token sales in 2017 and the $6.5 billion raised in just the first quarter of this year.
Behind the Blockchain: The Ethereum Community
The Ethereum developer community is estimated to be the largest in the world, at 250,000. In October 2017, Truffle — a development framework for Ethereum — surpassed 200,000 downloads. In less than a year, downloads are now at nearly 550,000. Github, which draws open-source developers from around the world, lists 14,000 repositories and 220,000 commits concerning Ethereum. MetaMask — a browser extension allowing users to to run dApps without running an entire Ethereum node — has reached over 1 million users.
Beyond the decentralized network of Ethereum developers, organized consortiums have arisen to support and expand the Ethereum community. The Ethereum Enterprise Alliance (EEA) formed in March 2017 with 30 founding members committed to the integration of blockchain technology with enterprise establishments. Now, just over one year later, the EEA has grown to over 500 members. Startups, corporations, foundations, and organizations have all come together to contribute and benefit from the continued development of the Ethereum ecosystem.
Welcoming Ethereum: Government Adoption
Though a long-discussed application of blockchain technology is the restructuring and even dissolving of traditional government, countries around the world have found ways to implement blockchain technology — specifically, Ethereum — to benefit their citizens. In the beginning of this year, the government of Brazil announced its intention to move petitions and popular voting onto Ethereum. Canada is testing out using Ethereum to provide transparency to the use of government grants to ease citizens’ concerns of misappropriation and corruption. The city of Zug, Switzerland — a long-time crypto bastion — began offering digital IDs registered on Ethereum in 2017. Chile uses Ethereum to track the data and finances from the energy grid, hoping to combat corruption and exploitation through transparent, immutable data available for every citizen to see. Dubai is on the move to become an entirely integrated, blockchain-powered city by 2020. Estonia became the poster child of the distributed ecosystem and matured into a “digital republic” by moving many of its national systems onto the Ethereum blockchain.
Though blockchain technology has been cited as an opportunity to re-define the current global political structure with digital borders and citizenships, current systems are not wary of using its immutable, secure ledger to augment their services. We will continue to see government adoption of the Ethereum blockchain as its utility is proven in current examples.
Building on Ethereum: Decentralized Applications
Decentralized Applications (dApps) are the primary selling point of the Ethereum blockchain. As an open-source, turing-complete, world computer, Ethereum can be leveraged by any developer to build her own series of smart contracts (i.e. a decentralized application). A site that tracks dApp development lists 1,552 launched dApps, though more are currently in development. DApps consist of everything ranging from prediction markets to gaming, and will continue to grow stronger as the network is improved upon.
The Elephant in the Room: Scaling Solutions
Scaling solutions for the Ethereum network are numerous, and are being worked on by multiple participants in the network. 2018 will be an exciting time for Ethereum, particularly with the projected testing of Proof of Stake through the rollout of the Casper protocol. Many active projects aim to provide layer 2 solutions, or “inter-blockchain protocols.” These initiatives tackle the “trilemma” of achieving scalability, security, and decentralization on a blockchain. Cosmos is a permissionless network built for developers that allows blockchain interoperability and scaling. Loom Network has developed and launched a layer 2 platform on top of Ethereum, allowing gaming and social dApps to scale while still relying on Ethereum’s core security and decentralization. The team has launched CryptoZombies, a live app enabling anyone to learn to code smart contracts on Ethereum (with over 200,000 students). OmiseGo allows users to send high-speed payment transactions between entities and across borders using plasma. Layer 2 scaling solutions, according to Vitalik Buterin, “can be built in such a way that they depend on the second level for performance, but not safety… They can then have the incentive of reputation and expected future revenue to drive them to perform well in the present, and the negative costs of any failure are mitigated.”
Looking Down the Road
What does this data mean? The Ethereum blockchain ecosystem is diverse, it is decentralized, it is strong, and it is flooded with innovation and activity. Since its launch in 2015, this rapidly-adopted and appreciated technology promises to solve issues plaguing almost every incumbent industry on earth. Across the world, developers, thinkers, innovators, leaders, and creatives are coming together to build a new way of communicating, transacting, and organizing. We’re here for Web 3.0. We’re here for a decentralized future. We’re here for Ethereum.