Crypto coder surge indicates blockchain’s back in business

• As bitcoin surged to a three-year high, software developers are flocking back to the cryptocurrency world at a level not seen since the market last peaked in 2017
• The first 10 months of 2020 saw the number of new monthly crypto developers rose 15%

In the past few years, cryptocurrencies and blockchain applications have been one of the most rapidly emerging fields of computer science, leading to strong demand for specialist software developers.

This year alone, Bitcoin’s value has risen by about 170%, hitting an all-time high of almost US$20,000 in three years. Advocates cited an increase in interest from institutional investors in the digital asset, which was invented in late 2008 by an anonymous developer.

But the cryptocurrency’s price wasn’t the only thing that sky-rocketed this year. A report from Electric Capital indicated that software developers are flocking back to the cryptocurrency world at a level not seen since the market last peaked three years ago.

A Bloomberg report, citing Electric, said the number of new developers increased this year for more than three months in a row for the first time since 2017 — in a turbulent market at the mercy of speculation, the new in-flow of coders is regarded as a promising bellwether for the technology. 

Earlier this year, Linkedin‘s Top 10 ‘Hard Skills’ of 2020 chalked up blockchain as the most sought-after tech skill in 2020. Additionally, with so-called decentralized finance, or ‘DeFi’ projects taking off with promises of quick money to be made, coders have dived back in. 

The promise of blockchain — essentially a shared digital ledger — is huge. Advocates see it as a secure, decentralized, and cost- and time-efficient way to transparently track shipments and transactions of all kinds. Skeptics, and there are many, raise concerns about the lack of standardized protocols, scalability, and excessive energy use (Bitcoin alone consumes as much energy as the nation of Switzerland).

However, the business world has taken a gamble on its potential, attracting firms like IBM, Oracle, JPMorgan, Microsoft, and Nestle, among many others. Blockchain is used in industries from shipping to healthcare, from farming and food safety to entertainment and gaming.

The rise of decentralized finance, or DeFi, which doesn’t rely on central financial intermediaries such as brokerages, exchanges, or banks, and instead utilizes smart contracts on blockchains like Ethereum, has also provided new, lucrative opportunities for blockchain developers. 

The return of coders

In the first 10 months of the year, the number of new monthly crypto developers rose 15%, according to Electric, with more than 80% of all active developers beginning their work in the last two years, the firm said.

“Developers are one of the signals of quality in a crypto ecosystem. In order for there to be network security or applications, developers need to build. Many projects like smart contract platforms rely on developers joining their ecosystem to be successful. Ethereum has more activity and this is why other platforms fight for developers. You need developers to build applications and have activity on-chain,” Electric partner Maria Shen said.

Indeed, the Electric report found that coders are gravitating to Ethereum and DeFi applications with the former seeing more than 300 developers join per month. Monthly active developers focused on DeFi — letting app users lend, trade, and borrow their coins — have ballooned by 67% since January, the report stated. The total pool of active crypto developers is about 9,000 a month, and DeFi attracted more than 900 developers in October. 

“In decentralized finance, developers have seen they can launch a protocol and very quickly get usage,” Shen said.

Bitcoin monthly active developers, in particular, grew by more than 70% in the last three years, although their numbers are down nearly 12% in October year-over-year, Electric found. It was also noticed that while developers flocked to top-200 projects by network value, all others lost supporters. Among projects that managed to draw more developers was Ethereum rival Polkadot and Tezos, and DeFi projects such as crypto exchange Uniswap and tools provider Chainlink.

The report also stated that EOS, which claims to have raised US$4 billion through an ICO, has seen its developer interest decline by 45% in the third quarter, with only 107 developers remaining.