Ethereum (ETH) founder Vitalik Buterin explained on social media why daily transaction count is a “tricky” measure of actual usage on the platform – but still maintained that usage was growing.
The explanation came in the form of a bit of self-deprecating fact-checking of a news post from TheBlockCrypto, in which the crypto news outfit reported that transaction levels on the smart contract chain had seen their highest levels in a year – over one million daily transactions.
To be fair (yes I'm arguing against my own interests) daily tx count is a somewhat tricky indicator. The reason is that the ethereum network has a hard gas limit of 8m/block ~= 50b/day, and for the last year we've been close to capacity (see https://t.co/gycUJy0WBQ )…
— Vitalik Non-giver of Ether (@VitalikButerin) July 1, 2019
However, Vatalik – knowingly “arguing against [his] own interests” – clarified that a higher overall number of transactions could instead indicate “that the [type of] transactions that users want to send are getting smaller.”
I appreciate your candor; it's *incredibly* refreshing. I'm sure @teo_leibowitz was going to tell me this tomorrow morning 😜
— Mike Dudas (@mdudas) July 1, 2019
He did however stick up for himself and for the Ethereum blockchain, by offering some evidence showing that, indeed, the smart contract chain’s usage is going up. He submitted that transactions fees are rising on the chain, indicating that users are competing to pay more to have their transactions included in blocks.
Looking at the fee chart from Etherscan.io, we see that there is indeed a visible uptick in fees.
(source: Etherscan.io)
And zooming in a bit, we can see this difference more pronounced versus more recent data.
(source: Etherscan.io)
Vitalik also pointed out that the recent Constantinople hardfork provided a slight speed bump, filling up more transaction space on the chain.
Second, the Constantinople fork *did* reduce block times and hence increase blocks/day ~5-7% (https://t.co/3Uto0Aim07), and network utilization, ie. percent of available gas space used, did go up from ~75% to >90% (https://t.co/gycUJy0WBQ)
— Vitalik Non-giver of Ether (@VitalikButerin) July 1, 2019
Quality vs. Quantity
Looking at the smart contract data aggregator Dappradar.com, we can get a sense for how weird the decentralized app (dApp) landscape can be.
(source: Dappradar.com)
On the Ethereum chain, we can see that the number one smart contract by transactions, the IDEX decentralized exchange, is doing the most transaction volume over the last seven days. But while IDEX has quite a lot of Ether volume as well going through it, other smart contracts in the top six like “dice2.win,” “My Crypto Heroes” and “CryptoKitties” have very high transaction counts coupled to comparatively small Ether counts running through them. And 0x, number two on the last, has zero.
We highly welcome deeper research and analysis in the composition of ethereum transactions and how it's changing over time!
— Vitalik Non-giver of Ether (@VitalikButerin) July 1, 2019
This goes to show that usage versus utility is perhaps not a straightforward and linear relationship, which seems to be what Vitalik was getting at. Some disaggregation is required.
We will humbly and proudly take on the challenge at @TheBlock__. I sense a deep research topic that we're going to tackle in the coming weeks / months. Thanks so much bud!
— Mike Dudas (@mdudas) July 1, 2019