Looking at the development of Ethereum in the first half of 2021 from a data perspective

Smart contract was first proposed by cryptographer Nick Sabo in the 1990s. It refers to a contract that uses computer language instead of legal language to record terms and is automatically executed by a program. It was not until the emergence of Ethereum that smart contracts finally officially entered the stage of history.

Ethereum is based on the underlying technology of the blockchain and supports users to build various applications through smart contracts. The characteristics of blockchain disintermediation, immutability, and traceability are also inherited by the Ethereum network. Scenes such as finance, the Internet of Things, and sports games can all be “disintermediated” transformation through Ethereum, and efficient and secure transactions can be realized without a third-party guarantee.

“It is not just a coin. It is a complete ecosystem that allows other applications to be built.” said Bradley Kam, CEO of Unstoppable Domains, a blockchain domain name service provider.

In the first half of 2021, Ethereum experienced a major reversal from peak to deep valley. On the one hand, successful examples such as Defi and NFT deployed on Ethereum have proved to us its imaginative “business capabilities”; but on the other hand, Ethereum itself has technical defects, high carbon footprint and high token volatility. The rate makes it questionable. How did Ethereum experience the big storms in the first half of the year? Standing at the intersection of time, we look back.

Ethereum: the king of smart contracts

At present, Bitcoin is firmly in the top spot among cryptocurrencies, and ETH is the second largest cryptocurrency after Bitcoin. As of July 21, Bitcoin ranked 11th in the global asset market value, with a market value of approximately US$577.66 billion. Ethereum ranks 47th in the global asset market value, with a market value of $217.659 billion, which is less than half of the market value of Bitcoin. There are currently approximately 116.8 million Ether in circulation, while Bitcoin is approximately 187.62 million.

Bitcoin is “digital gold”, providing a peer-to-peer electronic cash system, while Ethereum is an open source software platform for blockchain applications . Ethereum allows the building of decentralized applications (Dapps), that is, users and providers interact directly without a third-party platform. As of June 21, 2021, there are 3550 Dapps relying on the public chain. Since 2017 to 2018, there has been a rapid acceleration, which has promoted the rapid increase in the number of Dapps. Since 2019, the growth momentum has slowed down, which has promoted the steady growth of the overall number of Dapps.

Increment and total amount of decentralized applications

Looking at the development of Ethereum in the first half of 2021 from a data perspective

Data source: state of the dapps

At present, the competitive landscape of the public chain is still dominated by Ethereum. Since Ethereum introduced smart contracts to the masses, the encrypted market has shown a scene of “a thousand chains are coming together”. Various public chains have come forward and succeeded in the name of “upgraded” Ethereum, but most of them have ended in a hurry, even silently looking for them. trace. As of June 21, 2021, about 80% of the current Dapps are deployed on Ethereum, and the number of contracts reached 4780. As the “Ethereum killer” EOS accounts for only close to 10%, and other public chains can “get even less”.

Looking at the development of Ethereum in the first half of 2021 from a data perspective

Since 2021, Ethereum has experienced great ups and downs, and its market value and currency prices have maintained a consistent trend. Before May, Ether showed an upward trend, and in May it pulled up in a straight line. On May 12, the currency price reached a high of 4198.19 US dollars, and its market value was once close to 500 billion US dollars.

After reaching its peak, Ether continued to “dive” in a straight line with a reversal trend. As of May 23, the currency price fell by 50% in less than two weeks to $1923.2, and its market value fell to $268.503 billion. Since then, it has gradually fallen in shock. As of July 20, the currency price was US$1809.67 and the market value was US$203.574 billion.

ETH price and market value trend

Looking at the development of Ethereum in the first half of 2021 from a data perspective

Data source: qkl123

The average transaction volume of ETH refers to the ratio of the total transaction volume of ETH on the day to the total number of transactions on the day. This indicator can measure the activity of the network. In 2017, with the entry of new funds brought by the token ICO, a crazy bubble quickly piled up. On March 12 of that year, the average transaction volume of ETH reached an astonishing 362.9. But then ICO encountered strict supervision in China and was completely suspended. As the bubble receded, most of the projects disappeared, and the volume of each ETH transaction dropped rapidly and remained below 5.

In 2021, the average transaction volume of ETH will generally show a slight downward trend . However, it was suddenly pulled up in May, which was in line with the entire market. On May 19, the value was 6.69. The subsequent sharp drop may be related to regulation. As of July 20, the value was 1.82.

ETH average transaction volume

Looking at the development of Ethereum in the first half of 2021 from a data perspective

Data source: qkl123

The number of active addresses, that is, the total number of wallet addresses that have conducted transactions within the selected time period, this indicator can measure the true activity of a certain currency. The number of active ETH addresses reached 1.0277 million on May 10, 2021, reaching a record high. Then it fell back to 653,900 on July 20. Although the number of active addresses has a downward trend, the activity of Ethereum this year is higher than that of previous years, which is related to the degree of activity of Dapps built on Ethereum this year.

Number of ETH active addresses

Looking at the development of Ethereum in the first half of 2021 from a data perspective

Data source: qkl123

ETH inflation is the ratio of net issuance to total supply. The increase in supply means that each ETH’s equity in the network decreases. From August to September 2020, DeFi demand drove the growth of the issuance of Ether, and the inflation rate of ETH hit a record high. At the beginning of 2021, there was an upward trend, and the highest point was 14.23% on February 23. The cleanup of China’s mining circle has reduced the issuance of ETH, and the inflation rate has also decreased, and in June it dropped to about 5%. Ethereum’s inflation rate is currently at a low level.

ETH inflation rate

Looking at the development of Ethereum in the first half of 2021 from a data perspective

Data source: qkl123

The average single transaction fee reflects the average daily transaction fee for a single chain transfer. Driven by DeFi, the average single transaction fee of ETH reached an all-time high in September 2020, breaking through 0.032ETH. Since 2021, the average transaction fee has fluctuated at a high level, with the highest point reaching 0.024ETH on February 23. Since June, the value has fluctuated below 0.003, and the transaction fee of Ethereum is currently at a low value.

ETH average single transaction fee

Looking at the development of Ethereum in the first half of 2021 from a data perspective

Data source: qkl123

The average computing power reflects the computing power value of the mining algorithm, can reflect the mood of the miner group, and can also be used to measure the health of the network. The average computing power of ETH has shown an upward trend since 2020, and this momentum has continued since 2021, reaching 643.82 TH/s on May 20, a record high. Subsequently, China’s comprehensive clean-up of mining pools caused the average computing power to drop rapidly. On June 26, the average computing power of the entire network dropped by more than 25% to 477.52TH/s.

ETH average computing power

Looking at the development of Ethereum in the first half of 2021 from a data perspective

Data source: qkl123

The difficulty of mining reflects a certain parameter in the mining algorithm and can be used to measure the health of the network. The greater the difficulty of mining, the higher the average computing power, and the smaller the probability of successful mining per unit of computing power. The higher the cost of a 50% attack by hackers, the smaller the possibility of a “double-spend” attack. The healthier. The difficulty of mining has been rising since 2020. On May 20, the difficulty of mining reached 8.17P, which was a historical high. However, as China’s mining areas are cleaned up and computing power has declined, the difficulty of mining is gradually decreasing, and it was 6.12P on June 26. But at present, the difficulty of mining is still at a relatively high level in history.

Difficulty of ETH mining

Looking at the development of Ethereum in the first half of 2021 from a data perspective

Data source: qkl123

The average ETH gas price is the average of the gas prices consumed by all operations per day. Starting from September 2020, the average price of ETH gas has risen above 330GWei. This is related to Defi’s requirement that the Ethereum network handle more and more amounts and more and more complex transactions. The average gas price in the first quarter of 2021 has an upward trend. The sharp increase in the gas price in recent months is related to the trend of Ether, and the duration is relatively short. It reached a peak of 245.68GWei on February 23. Subsequently, as the congestion of the Ethereum network gradually eased, the gas price also declined.

ETH average gas price

Looking at the development of Ethereum in the first half of 2021 from a data perspective

Data source: qkl123

The total ETH gas consumption reflects the sum of the gas consumed by all operations on the chain each day. The total consumption of ETHgas in the first quarter of 2021 maintained the level at the end of 2020, fluctuating around 80 billion, but suddenly pulled up in a straight line in mid-to-late April, breaking through the historical high, and then fluctuating between 96 billion and 94 billion. This indicator reflects the increase in the amount of energy consumed by Ethereum this year. This increase is related to the soaring transaction volume and activity of Ethereum.

Total ETH Gas consumption

Looking at the development of Ethereum in the first half of 2021 from a data perspective

Data source: qkl123

The block size reflects the number of blocks generated in the network every day. A larger block means that the amount of data in a single block package transaction increases, but the speed of information dissemination slows. The block size has remained around 45KB since April 2021, and subsequently fluctuated with the market trend, reaching a record high of 62.14KB on July 19th. This indicator reflects that the amount of data packaged in Ethereum has risen to a new height this year.

ETH block size

Looking at the development of Ethereum in the first half of 2021 from a data perspective

Data source: qkl123

Analysis of the reasons for the trend of Ethereum in the first half of 2021

A large part of the increase in the price of Ether can be attributed to the hot DeFi and NFT . 2021 is also a significant year for Defi and NFT. A large number of cryptocurrencies have poured into Defi, and NFT auction prices have repeatedly hit new highs. As the underlying protocol platform of Defi and NFT, Ethereum has gained a wave of attention.

From lending, margin trading, payment, to insurance and other fields, DeFi has established a huge network of integrated protocols and financial tools. Defi has seen a straight line from 2020 to 2021, and it exceeded US$88.8 billion on May 12, 2021. However, due to the price fluctuations of nearly 100 cryptocurrencies and the rising transaction fees of Ether, Defi showed a downward trend in mid-May. It is not difficult to find that the market value of Def is surprisingly consistent with the direction of Ethereum.

Looking at the development of Ethereum in the first half of 2021 from a data perspective

Looking at the development of Ethereum in the first half of 2021 from a data perspective

Data source: statistics, qkl123

“As the inflation rate rises, the DeFi products on Ethereum are the perfect way for people to cope with the uncertainty caused by central bank money printing and various supply shocks.” Chainlink co-founder Sergey Nazarov ( Sergey Nazarov) stated in an email to CNN Business.

NFT will also usher in explosive growth in 2021. The full name of NFT is Non-fungible Token, that is, non-fungible token, which is a technology to verify the flow of intellectual property rights on the blockchain. These data can be artworks, game virtual goods, access to private networks, and so on. Beginning in 2021, various celebrities and artists have entered the venue and made a lot of money by auctioning the ownership of digital artworks.

NFT showed an overall upward trend before May 2021. As of May 7, 2021, the total sales of NFT in the first 30 days reached 325 million U.S. dollars. The market then fell and has gradually recovered since June. The enthusiasm of the NFT market has also driven the popularity of Ethereum, and the trends of the two markets have a high degree of similarity.

Looking at the development of Ethereum in the first half of 2021 from a data perspective

Looking at the development of Ethereum in the first half of 2021 from a data perspective

Data source: statistics, qkl123

Although the development of Defi and NFT allows the use of Ethereum smart contracts to be reflected, Ethereum currently has shortcomings. On the one hand, it is the high carbon emissions that have been criticized by environmentalists. On the one hand, there is a price bubble or a crisis that will disrupt the economic order. For these reasons, the price of Ethereum plummeted after reaching its peak.

Tesla CEO Elon Musk, the man who makes the participants in the currency circle love and hate, personally sent cryptocurrency to the air this year, and then personally pulled it down. On March 24, 2021, Musk tweeted that consumers can use Bitcoin to buy Tesla. As soon as this remark came out, the entire crypto market was boiling, and cryptocurrency seemed to usher in the “strongest Bole”. But on May 12, because of concerns about the consumption of fossil fuels by Bitcoin mining, Musk tweeted that Tesla has suspended the use of Bitcoin to purchase vehicles. The confidence built up in the crypto market fell to the bottom in an instant. Musk’s sequential contrast with Bitcoin has driven the trend of market sentiment and also reflected the energy consumption of the troubled cryptocurrency.

“We are worried that mining and trading with Bitcoin will lead to a rapid increase in the use of fossil fuels. In particular, coal has the most serious carbon emissions.” “Cryptocurrency is a good idea…but it cannot be at the expense of the environment. “Musk said.

China strictly regulates the cryptocurrency market. On May 18, 2021, the People’s Bank of China issued the “Announcement of China Internet Finance Association, China Banking Association, and China Payment and Settlement Association on Preventing the Risk of Hype in Virtual Currency Transactions”. The announcement stated that financial and payment institutions must not accept cryptocurrency as a payment and settlement tool, or provide services and products related to cryptocurrency. Subsequently, the Industrial and Commercial Bank of China, Agricultural Bank, Construction Bank, Postal Savings Bank, Industrial Bank and Alipay announced the prohibition of providing services for virtual currency transactions.

The recent violent fluctuations in the price of cryptocurrency have “seriously violated the people’s property security” and disrupted the “normal economic and financial order”. The announcement stated that “they increase the risk of illegal cross-border transfers of assets, money laundering and other crimes, and seriously infringe upon the public’s security. Property security.”

According to a survey by the Cambridge Center for Alternative Finance (CCAF), in September 2019, China accounted for 75.5% of the mining industry in the cryptocurrency market. As a major “export” country of cryptocurrency computing power, China’s every move affects the nerves of the cryptocurrency circle. . Since 2021, “mining” has ushered in the strictest supervision in history. China has comprehensively rectified and cleaned up the “mining” business of virtual currency, and places such as Inner Mongolia, Qinghai, Xinjiang, Yunnan, Sichuan and other places have responded to supervision. On June 22, Bitmain told the miners that it would stop selling spot machines in China and subsequently announced a full overseas transfer. The cryptocurrency market was “sufferably injured” in this rectification operation. Digital currency trading platform OKEX estimates that China’s mining ban may cause as many as 90% of the country’s mining activities to go offline.

“This marks the end of the era of cryptocurrency mining in China,” said Winston Ma, an associate professor at the New York University School of Law.

On June 24, 2021, the Ethereum testnet launched the London upgrade. Within a day, 100,000 Ethereum was pledged on ETH2.0, worth about 200 million U.S. dollars. The opening of the London upgrade means that ETH2.0 is also coming. Getting closer. Ethereum 2.0, also known as “Serenity”, refers to a set of interconnected upgrades that try to shift from POW to POS consensus mechanism. These upgrades will make Ethereum more scalable, safer, and more sustainable.

  • POW (Proof of Work) is proof of work. The proof of work mechanism is to use the results and contributions of the work to determine the power of bookkeeping, that is, more work and more benefits. This consensus mechanism has the disadvantages of high resource consumption, poor network scalability and long consensus confirmation time.
  • POS (Proof of Stake) is a proof of equity, which determines the accounting right by calculating the percentage of the total number of coins held and the time of possession of the number of coins. This is more like a stock dividend system. The more coins you hold and the longer you hold them, the more benefits you can get. Although this consensus mechanism has a low degree of decentralization, it can shorten the consensus time and improve efficiency on the basis of consuming less energy.

Ethereum co-founder Vitalik Buterin stated that moving to proof of stake will reduce Ethereum’s energy usage by 1,000 to 10,000 times. “We went from consuming the same energy as a medium-sized country to consuming the same energy as a village.”

Where does Ethereum go in the future? Ethereum has built a decentralized bottom platform that connects reality, allowing it to continuously shape new business models, which will be the “assuming” for its future development. In addition, ETH2.0 allows us to see a better situation, a super public chain with low energy consumption, high efficiency, and strong scalability. But at the same time, the bubble will be a major hidden danger for the development of the blockchain, and speculative bets obscure the long-term bullish prospects of Ethereum.

Market forecaster Jim Bianco said, “Tokens like Ethereum will go higher in the future”, “but in the next few months or a year or so, you will I have to endure more of what we saw last week (the sharp fall in Ether in the week before May 27, 2021).”

Author | Lishan Chen

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/looking-at-the-development-of-ethereum-in-the-first-half-of-2021-from-a-data-perspective/
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

Like (0)
Donate Buy me a coffee Buy me a coffee
Previous 2021-07-23 07:59
Next 2021-07-23 08:00

Related articles