The most basic idea behind smart contracts like those used on the Ethereum blockchain is that they can be precisely that: contracts.





Traditionally, contracts tend to be agreements for an exchange of money in return for goods or services. The advantage of a smart contract is that it can execute these terms trustlessly and automatically. So if, for example, I have a book and you’ve agreed to buy it, you can send me the money, safe in the knowledge that the smart contract will detect that and send you the book automatically. You don’t have to put any trust in me.





But the definition of smart contracts, at least in the vernacular, has expanded to include other kinds of transactions, including data-based transactions for programming that include no real exchange of monetary value at all.





So which type of “contract” is more common on the Ethereum network? We looked at a sample of 1,000 transactions on the Ethereum network from December 1, and found that a strong majority of transactions — 88% — contained no exchange of monetary value, i.e., no ETH was sent or received as part of the transaction. (Note: ERC20 transfers were excluded from the sample).









This means that most of the transactions on the Ethereum network are data exchanges rather than money exchanges, and that relatively few people are actually using smart contracts as a sort of automated replacement for traditional contract transactions.





This is interesting data, and a potential sticking point for Ethereum’s long term success. Transactions, even money-less data transactions, still cost gas to execute. If Ethereum aims to be a major computing platform in the long term, affordability could become a problem.





Diana Rees is the CEO of zkSystems.





This piece was updated on January 5, 2018.







