Ethereum analysis: transactions and blocks
In this article we will analyze the data around the Ethereum blocks and transactions. First, if want to know more about the Ethereum blockchain here is an introduction: https://codethekey.com/introduction-to-ethereum/.
We are going to analyze the Ethereum data regarding the amount of transactions and blocks, the price, the size, the gas and others. We’ll also check if there’s a correlation between the volume of transactions and the price, and compare it to Bitcoin. The analysis covers the Ethereum activity from 2015 to march 2021.
The data sources we used to compute our analysis is coming from https://etherscan.io/charts. This site gives a wide range of informations about Ethereum.
The whole analysis is done on a Jupter notebook which can be found in the Github repo: https://github.com/pelletierkevin/blockchain-analysis/blob/main/ETH/Eth_Transactions_Blocks_Analysis.ipynb
Amount of blocks per day
We are going to first observe the amount of blocks which are delivered per day in the Ethereum network. The Ethereum blockchain is currently (March 2021) composed of more than 12 millions blocks.
We can see the amount of blocks integrated in the blockchain increase over time. The count was around 5,000 in 2016 and is currently up to 6,500 blocks per day in March 2021. The growth isn’t linear but is rather following a ladder pattern.
What’s interesting to check is the amount of blocks per second to have a concrete idea of the Ethereum speed. Taking 6,500 blocks per day, it gives 0.075 block per second or 1 block every 13.5 seconds. The frequency is much higher compared to Bitcoin which generates 1 block every 10 minutes.
Average block size per day
Each block is composed of multiple transactions in the Ethereum network. The transactions are all different in sizes, leading to different size in block. The size of individual blocks on a blockchain can have a potentially large impact on the speed and capacity of the network. We can observe below the graph plotting the average block size in bytes per day.
The graph shows that until mid 2017 the size was really low, then it averaged around 22,000 bytes for 2.5 years. Since the beginning of 2020 the size keeps increasing and is now averaging around 45,000 bytes in march 2021.
Amount of transactions per day
In this part we’re going to observe the amount of transactions generated per day and the correlation with the Ether price. Then we’ll compare the results with Bitcoin.
Let’s start by plotting the amount of transactions per day and its average graph with a window of 100 days.
In the first graph we can see that the behaviour of the transactions per day is relatively similar to the price of Ether. The graph showing the price of Ether per day is shown a bit below in the next part so you can visually compare the graphs. The graph makes sense as during the peaks, Ethereum is probably more popular, giving chance to gather more users, consequently generatic more transactions. Since the beginning of 2020 the amount of transactions per day keeps increasing and is up to more than 1.2 millions transactions per day in march.
In the second graph representing the same as the previous one, with each point representing the average value of the last 100 days. This makes a smoother graph and it is easier to observe some trends. In fact, we can now see that 2021 has much more transactions than during the peak of 2018 and it keeps increasing.
Correlation with Ether price
Here is the famous graph showing the daily price of Ether from 2016 to 2021.
To compute and have a mathematical representation of the correlation between the 2 data sets (price and transactions) we can use the Pearson coefficient.
The Pearson correlation is a number between -1 and +1 that indicates to which extent 2 samples are linearly related. If the correlation between two samples is equal to 1 it means they are extremely correleated. If it is equal to 0 they are not correlated at all, and if the coefficient equals -1 they are correlated in an inverted manner (e.g. one going up the other one going down).
The computation of the Pearson coefficient here between transactions and price of Ethereum gives:
Pearson(Transactions, Price) = 0.7107 which indicates they are quite correlated.
Comparison with Bitcoin
Ok so there is an important correlation between the daily amount of transactions and the price of Ethereum but maybe it’s just logic and all blockchain are similar? Let’s compare with Bitcoin. Below are the graphs representing the price of Bitcoin and the amount of Bitcoin transactions per day.
The computation of the Pearson coefficient here between transactions and price of Bitcoin gives:
Pearson(Transactions, Price) = 0.4301 which indicates they are not highly correlated.
Eventually, by watching the graphs we cann see the amount of transactions for Bitcoin doesn’t really follow the price. In 2021 the Bitcoin price is having a peak but is not reflected on the amount of transactions. The trends shown in the windowed average amount of transactions shows that the number isn’t increasing since 2020. This may be explained by people making big transactions rather than mutliple small ones, or that most of the users are holding their Bitcoin. The price goes up but the daily volume of transactions isn’t really affected.
Amount of transactions per second and per block
To have a concrete idea on the capacity of the Ethereum network it’s also interesting to check the amount of transactions delivered per second and per block.
Of course, the patterns of the graphs are really similar with each other and with the transactions per day. What is interesting here is to watch the range of values.
In march 2021 we can see that Ethereum generates around 15 transactions per second. This is approximately three times higher than Bitcoin which is around 4.5 transactions per second.
On the second graph, we see that each Ethereum block contains around 200 transactions in 2021. The value was around 100 transactions per block before 2020, meaning the capacity doubled.
Average Transaction size
We saw in a previous section that the average block size per day is increasing since 2020. Additionally, we saw that the amount of transactions per block doubled from 2020 to 2021. By linking the 2 observations together we can easily have the picture. The amount of transactions per block doubled so it means the size of the block also doubled. This assumption is true, if the average size per transaction is constant, otherwise the block size growth would be much higher. Let’s observe the average transaction size graph.
The graph clearly shows that the average size of a transaction is constant. The main factor playing a role in the block size is the amount of transactions.
Gas used per day
As explained in the introduction to Ethereum article the gas is used internally in the Ethereum blockchain to charge every user wanting to do a transaction or a smart contract. In 2021, there are many complaints about the very high fees price to use the Ethereum network. Let’s verify this by observing the graph showing the amount of gas used per day.
Indeed, the amount of gas used is higher than ever, even during the 2017 peak. The amount of gas used per day also doubled here from 2020 to 2021 and seems to be reaching a plateau. There are many propositions aiming to reduce the fees of using Ethereum, so hopefully we will see the graph decreasing in a few months.
In 2021, the Ethereum network is spending around 80 billions gas per day.
Gas used per transaction
Finally, after seeing the amount of gas increasing a lot in 2021, let’s observe the average amount of gas used per transaction. The second graph shows the same data with an average window of 150 days for each data point.
The first graph doesn’t really show a clear trend as there are some outliers. In the second graph we can clearly see that the amount of gas used per transaction have a regular growth since 2017. Today in march 2021, a transaction is using more than 65,000 gas. We know the amount of transactions per day in March is 1.2 millions, so we can compute the amount of gas per day. The computation gives: 1,200,000 x 65.000 = 78,000,000,000. The result confirms what we found in the previous part, giving around 80 billions gas used per day.
However, we can’t say here that the amount doubled between 2020 and 2021 like the gas used per day. What is driving the amount of gas up per day is mainly the amount of transactions even if the gas price still plays a role.
To sum up we can see that all of the Ethereum components (transactions, blocks, gas) are increasing over time.
- 5000 blocks/day in 2016 to 6500 blocks/day in march 2021.
- 40,000 transactions/day in 2016 to 1.2 millions transactions in march 2021.
- 2.5 millions gas/day in 2016 to 80 billions gas/day in march 2021.
What we found is that there is a notable correlation between the daily amount of transactions and the price of Ether using the Pearson coefficient. Bitcoin doesn’t have the same correlation between its transactions and its price. The Ethereum price is driven by its utilization.
The average block size is also increasing a lot in the recent years and we found it is mainly due to the increased amount of transactions. The average transaction size is kept constant over time. We also see the gas price to increase at its own pace.