Great question. I had to do some research to find out.
Currently version is actually 4 bytes. In the case of this block (and many other recent blocks, as it turns out) it's
01000020. This is little endian, so when you reverse the bytes in hex it's:
0x20000001 = 536870913
Which in binary is:
It turns out that the bits here follow the BIP0009 spec. You can get a more user-friendly explanation of BIP0009 here. Essentially, BIP0009 specifies that version bits are to be used to signal support for a soft-fork. In this particular case by using that that extra "1" at the end, the miner that mined this block is expressing support for BIP0112 otherwise known as OP_CHECKSEQUENCEVERIFY.