Ethereum 2019 Half Year Record: Out of Winter and Towards Prosperity

Before Libra came out, the two most popular currencies in the world were Bitcoin and Ethereum. Currently, Ethereum's market value is still second only to Bitcoin. The concept of Ethereum was first proposed by programmer Vitalik Buterin between 2013 and 2014 after being inspired by Bitcoin. It roughly means "the next generation of cryptocurrency and decentralized application platform" and was developed and expanded through ICO crowdfunding in 2014.

Since 2019, Ethereum has also emerged from the cold winter along with Bitcoin, with the price of the coin rising by more than 50% and hovering around $207. On July 22, the fifth anniversary of the Ethereum crowdfunding pre-sale, the media under the blockchain technology company ConsenSys released the "Ethereum Development in the First Half of 2019" report, which discussed the exploration and achievements of enterprises, governments, and investment institutions in the blockchain world based on Ethereum's achievements in the past six months.

In the past six months, the Ethereum mainnet has processed 130 million transactions, helping the total number of transactions exceed the 500 million mark, and the network utilization rate has stabilized at an average of 90%. There are more than 70 million unique addresses on Ethereum, of which 16 million (16%) have been created since the beginning of this year. Among all categories and platforms, 44 (88%) of the top 50 Dapps with the most active developer activity are built on Ethereum. In addition, the number of active developers on Ethereum has reached 216 per month, and the number of core protocol developers is far ahead of other cryptocurrencies.

It is worth mentioning that the prosperous development of Ethereum is a microcosm of the blockchain world.

In the first half of this year, enterprises are still the pioneers in blockchain technology exploration. They promote the development of the blockchain industry through investment and R&D innovation, and provide more opportunities for decentralized technology. In particular, Facebook launched the Libra white paper in June, which brought cryptocurrency back to the center of public opinion.

Governments around the world are also eager to try out the blockchain world. Developed countries, mainly the United States and Europe, are constantly taking the initiative to avoid missing out on the window of opportunity and development dividends that blockchain technology may bring.

Venture capital firms around the world are continuously increasing their investment in the blockchain industry. In April this year, Reuters reported that so far in 2019, venture capital firms have invested nearly $1 billion (about $850 million in total) in blockchain startups, making venture capital funds in the entire ecosystem today expected to exceed the record $2.4 billion in 2018.

Looking to the future, Ethereum 2.0 has already set sail, heading from the old world of PoW to the new world of PoS; and the blockchain world is becoming more exciting.

The following is the full text:

Five years ago, or more precisely on July 22, 2014, Ethereum was launched in the form of crowdfunding. The various interest groups related to Ethereum, including developers, startups, and entrepreneurs, were passionate about the years. Five years later, the blockchain ecosystem has not only become more diverse, globalized, and decentralized, but also performed well in terms of importance, leadership, and popularity.

The blockchain ecosystem went from hot to cold in 2018, and the price of cryptocurrencies also fell from the historical high in 2018. In 2019, although the market is still volatile, the entire industry will still usher in a strong, stable and growing ecosystem. Especially for Ethereum, 2019 means vitality, money-making power and continuous improvement.

It’s been a great year so far, and we’re only halfway through 2019.

Ethereum’s development this year

Since its inception, the Ethereum mainnet has processed more than 500 million transactions; in 2019 alone, 130 million transactions have been processed, and the network utilization rate has stabilized at an average of 90%. The number of unique Ethereum addresses exceeds 70 million, of which 16 million unique addresses were successfully created this year.

On June 1, there were 616,000 active addresses transacting on Ethereum, the busiest day in the first half of 2019. The total ETH supply is 106 million, with an average of 2.28 ETH per address. Excluding the top 500 addresses by ETH ownership (which hold 37% of the total supply), the average ETH holding per address is 1.43 ETH.

In February, Ethereum underwent the Constantinople upgrade, a planned hard fork to improve the network and bring it closer to Ethereum's final milestone, Serenity. A major change that comes with Serenity is that Ethereum's blockchain consensus algorithm will shift from Proof of Work (PoW) to Proof of Stake (PoS). The Constantinople upgrade incorporates five different improvement proposals (EIPs). Notably, EIP 1234 reduces the block reward from 3 ETH to 2 ETH, a development also known as The Thirdening.

Enterprises are pioneers in the blockchain world

In the economic society, enterprises have always been the pioneers of blockchain use. They are especially large enterprises, which promote the development of the blockchain industry and provide more opportunities for decentralized technology through investment, R&D innovation, proof of concepts (POCs) experiments and partnerships. This year, we have seen corporate activities with the theme of "focusing on privacy".

Libra's declaration of emergence reflects people's yearning for data privacy, even if the declaration itself is full of ideological, regulatory and technical considerations. In April, ConsenSys's Pegasys Tech team launched a new enterprise Ethereum client Pantheon 1.1, implementing Orion as a privacy transaction manager to specifically address corporate concerns about privacy. In May, Ernst & Young (EY) launched Nightfall, a free software designed to help corporate clients use the Ethereum blockchain. It was released as open source on Github, enabling standard ERC-20 and ERC-721 tokens to be traded on the Ethereum blockchain with "complete privacy."

In addition, consulting firms and research institutions have fully recognized the efficient exploration of enterprises in the blockchain world. In June, a report by consulting and analysis firm Gartner predicted that by 2025, blockchain will add $176 billion in value to enterprises, and by 2030, blockchain will add $3.1 trillion in value to enterprises. Of the $3.1 trillion in added value, less than $1 trillion was created by internal improvements within enterprises.

In 2018, Deloitte interviewed 1,000 executives who focused on blockchain development, asking about their vision for 2019 and beyond. According to its report, 95% of entrepreneurs plan to invest in blockchain technology in 2019; nearly 40% plan to invest $5 million; 84% believe that blockchain is ultimately scalable and will achieve mainstream adoption; and 39% believe that blockchain technology is "overhyped." Executives from the automotive, oil and gas, and life sciences sectors are most optimistic about blockchain, followed closely by the financial services sector.

From a macro-trend perspective, corporate executives are cautiously exploring the blockchain world and paying attention to the opportunities brought by decentralized technologies. Goldman Sachs, a Wall Street investment bank, is an example. The bank has quietly posted a job posting to attract a "digital asset project manager" to join its internal incubator project.

Governments are also eager to try

In 2019, governments around the world have shifted from investing in blockchain projects to launching their own pilot projects. This approach is intended to modernize the current operations of government departments. In Europe, the Luxembourg government supports the development of domestic blockchain startups through projects such as Mind&Market, Horizon 2020, Lhoft, Letzblock, and LuxInnovation. Germany funds related projects through its local blockchain lobbying group Bundesverband. The Swiss government funds blockchain projects through its own Blockchain Federation.

Currently, Europe is at the forefront of the world's blockchain development. 29 of the 44 European countries have signed the European Blockchain Partnership Agreement and will work together to establish the European Blockchain Services Infrastructure (ESBI). Governments in other countries around the world are conducting blockchain-based initiatives to explore localized blockchain solutions: a team in Georgia, USA, is using blockchain technology to simplify the framework of land registration; Changzhou, Jiangsu Province, China, is working with Alibaba to create the first medical scenario "blockchain"; the Australian government is using blockchain technology to help its exporters track the supply source of sugar products.

Dozens of central and local banks are also actively moving towards blockchain technology in order to improve the efficiency of handling long-standing problems. Among them, the Union Bank of the Philippines (UBP) is promoting its i2i (island-to-island) blockchain plan to solve high remittance fees. The Central Bank of Brazil uses blockchain technology to develop a system for interbank payments, Project SALT, and a decentralized information exchange platform, Project PIER. The Bank of Thailand, the Central Bank of South Africa, and the Monetary Authority of Singapore have created a project to study alternatives to the current system by using central bank-issued digital currencies (CBDCs). At the end of 2018, the World Bank also launched the first blockchain-based bond "Bond-i", raising $110 million. This marks the first time that investors can fully use blockchain technology to manage their activities.

The United States has taken a bigger step. The country is formulating laws and regulations to manage "mining behavior." In February this year, the governor of Wyoming signed HB0070, authorizing the Secretary of State to develop and implement a blockchain-based file system for corporate entities and business documents; in March 2019, the governor of South Dakota signed HB1196, which provides a definition of blockchain technology for specific purposes; Arkansas also signed HB 1944, which stipulates that contracts containing smart contract clauses related to transactions cannot deny their legal effect, validity or enforceability.

Generally speaking, government departments are often slow to catch up with the trend of innovation, but we still expect that more and more countries in the world will explore the world of blockchain.

Venture capital institutions are increasing their investment

Despite the volatility of cryptocurrency prices, venture capital has not stopped flowing to many projects and development teams that are building some of the more exciting decentralized applications (Dapps). In April, Reuters reported that venture capital firms have invested nearly $1 billion in blockchain startups so far in 2019 (about $850 million in total), putting the entire ecosystem on track to exceed the record $2.4 billion in venture capital funding in 2018. In 2018, the record investment came from 117 venture capital deals, while this year's $850 million investment came from only 13 venture capital deals, indicating that the investment amount per transaction has increased, and that venture capital firms are more confident in blockchain technology.

The report states that VC money will not go directly into areas such as cryptocurrencies, which means that VCs are still hesitant to actually enter the trading market. In the near future, we may continue to see that such high-risk investments remain in the field of individual traders and high-risk private funds. Instead, VC funds will flow to projects and teams that support the growth of the ecosystem. That said, Reuters mentioned that tokenization is one of the main interests of VCs in terms of the potential of decentralized technology.

Ethereum developers’ “circle of friends” is becoming more and more popular

Electric Capital released a developer report in March 2019, tracking the distribution of developers across major blockchain platforms in the entire cryptocurrency ecosystem. So far, Ethereum has the most core protocol developers, with Bitcoin and Cardano ranking second and third respectively.

Ethereum has 216 active developers per month working on all code outside of core protocol development. Ethereum’s developer base continues to grow strongly, with an average of 240 active developers in January 2019, up 23% from 180 in 2018.

Ethereum also stands out among all code projects, with 8 times more code commits than Bitcoin and 20 times more than XRP.

The Ethereum development framework Truffle Suite provides a powerful set of tools for developing dApps and smart contracts. Since its launch in May 2015, Truffle has been downloaded more than 2 million times. Ganache is the second product developed using Truffle. It is a private Ethereum blockchain client for developers that can be used to locally deploy, develop, test applications, and test code. Since its release in October 2017, the product has been downloaded 1,227,844 times, with 79,546 downloads in June 2019 alone.

The Dapp Wars: Ethereum is way ahead

Since the early days of blockchain, the Ethereum community has been competing to create the "killer Dapp" - a competition to become a global utility and prove that one protocol is better than another. But for the most part, this mentality has faded. Few protocols are ready to scale globally, and so are the Dapps built on them. Instead, the Dapp industry has evolved into a cluster of both early-stage and more mature projects, all of which are digging deeper into the use cases of Dapps to meet the greatest demand, achieve the best UX, and maintain the best security. Broadly speaking, financial Dapps (including exchanges, DeFi, etc.) have become the focus of Dapp developers over the past year.

Of the top 50 Dapps ranked by Dapp status (ranking is based on “various factors including active users, tx volume, developer activity, CTR, and user recommendations”), 29 Dapps are built on Ethereum.

Of the top 50 financial dapps, 42 are based on Ethereum, including MakerDAO and OmiseGO.

Of the top 50 exchange dapps, 44 are based on Ethereum, including Augur and Uniswap.

Of the top 50 securities dapps, 42 are based on Ethereum, including Quantstamp.

Of the top 50 Dapps in development, 43 are based on Ethereum, including Kauri, Golem, and Cryptozombie.

Perhaps most tellingly, of the top 50 Dapps with the most active developer activity across all categories and platforms, 44 (88%) are built on Ethereum; Ethereum still has the strongest developer community, according to State of the Dapps statistics.

Ethereum 2.0 sets sail: heading to the new world of PoS

For Ethereum, it is unlikely that its growth will slow down in the rest of 2019. In recent weeks, the cryptocurrency market has broken its stagnation and revived the interest of retail and institutional investors. As for the Ethereum protocol itself, the Istanbul hard fork upgrade is scheduled for October 2019. The Istanbul upgrade currently contains 11 proposed improvement proposals, which will be the last upgrade to the current Ethereum old chain before the release of Serenity Phase 0.

Serenity Phase 0 (Beacon Chain) is scheduled to launch in early 2020 and will undoubtedly be a hot topic of discussion in the Ethereum and blockchain community in the second half of 2019 as Ethereum core developers and the wider ecosystem turn their attention to the implementation of PoS and the promise of improving Ethereum’s scalability.

Author | Hu Chen, please indicate the source for reprinting