Quantifying Blockchain Network (De)Centralization

Over a year, multiple drafts and many debates later, we are so excited to finally publish our framework of data-driven metrics that would hopefully bring more meaning to the term “decentralization”.

Direct link to PDF: Ketsal Open Standards – Measures of Blockchain Network Centralization

Here are some of my favorites that we discuss in the framework:

  1. Mining Power Concentration – the only metric in the framework that sits across all three layers of decentralization (computational, economic, political). One only has to look at the recent strike by Filecoin miners to appreciate its importance.
  2. Market Attack Cost – how much would it cost to cause the market price to crash to zero? How many BTC’s would I have to sell/short?
  3. Potential Access to Material Non-Public Information (MNPI) – examples include core devs having access to information regarding critical bugs and making decisions before revealing the MNPI to the public.

You may also be wondering where the Bahamas Test is – if you figure out a way to quantify this, do let me know 🙂

Many thanks to Nicholas Gans Adam Zarazinski Zach Finzi Diana J. Stern and Lane Rettig for your help and feedback on this!

Add a Comment

Your email address will not be published. Required fields are marked *