Data Science Studies: Ethereum, Blockchain-Based Distributed Computing Platform
As we have promised, we are presenting our new data studies to focus on the Ethereum network transaction stats. In the previous blog post, we introduced you the problems in financial inclusion and some visualizations to help you understand the population that will eventually be presented with the Colendi benefits. In this blog post, we aim to introduce you Ethereum with some of its features. Ethereum is an open software platform based on the blockchain technology that enables to run decentralized applications through its’ smart contracts. Before we dig into the details and some metrics regarding the current Ethereum transactions, let’s first talk about decentralization and why it matters for Colendi and Ethereum’s role in creating unique projects. This post is not intended to give comprehensive information about blockchain or Ethereum but instead talks about the new blockchain space and some metrics to analyze. You will grasp the idea of investigating the new digital age from the perspective of data.
One of the most critical issues in today’s world of virtual networks is privacy. It’s possible that you recently may have heard this term more frequently than ever. After Mark Zuckerberg’s Facebook hearing and the data breach of Equifax, people started to realize how dangerous it can be to store and give access to their data through centralized companies. Today, personal data, passwords and financial information are stored in clouds or servers run by giant companies like Amazon, Facebook, and Google. Although these companies take certain precautions and build their security teams to prevent any data leak or hacker attack, recent events once again showed us that from the moment a person shares his data, there is a certain probability that his data will be hacked and seized. Ethereum, on the other hand, provides developers a decentralized environment to run their codes.
Without going into more details such as scalability, and availability of the overall system based on the blockchain technology; Ethereum, being a distributed public blockchain network run by nodes instead of clouds or servers, aims to build a more democratized and more secure environment to the existing client-server models.
Bitcoin or Ethereum
Like Bitcoin, Ethereum offers a distributed blockchain network. Although there are significant differences between these two, the most crucial distinction is their purpose and capability. Bitcoin enables its users to send peer to peer electronic payment which is leveraged in many application domains. Ethereum, on the other hand, supports many different use cases where decentralization is sustained by smart contracts. You can check other sources for their differences such as token types, valuation, cost assigned to operations, etc. Ether is the digital currency, which is used as currency on Ethereum.
While blockchain space improves its technical capabilities, this new space welcomes diverse research areas and domains. We present you some visualization graphs which could be leveraged to understand this new space and its specific characteristics further. The charts below show you some metrics that you can interactively change to allow you to observe the changes. The first graph shows exchange volumes and market cap aggregated for each day, whereas the second graph shows you the price, generated coins, fees, and active addresses in Ethereum transactions. You can hover over these graphs and zoom to increase time granularity.
Visualizations like these are useful for making business decisions, not only for cryptocurrency enthusiasts who are active in trading Ethereum but also for system architectures as it signals the needs to improve system architecture with increased transaction volumes.
Network graphs like the one below are good at showing interactions between different parties in any system. The nodes are fundamental representations of different actors and the interactions, or the connection between them can be revealed using edges. The thickness of the edge between any two nodes is linked to the strength of the relationship, whereas color codes can be used to differentiate between these nodes based on their descriptive values. Each node below represents a different wallet, and each edge between any of these nodes shows the transaction volume between them. You can hover over or zoom in and out to observe the relationship between nodes. *The data is from Google Ethereum Dataset, first three thousand Ethereum transactions on