Post
Topic
Board Altcoin Discussion
Merits 5 from 2 users
Re: How would you measure Decentralization?
by
Frink
on 21/06/2019, 20:34:00 UTC
⭐ Merited by suchmoon (4) ,xtraelv (1)
As far as I know, there's no measure of decentralization yet. But you can measure centralization at a approximate level. For example, Bitmain is holding around 42% hash rate of Bitcoin Cash. It's very close to 51% attack's redline. And hence, BCH's centralization is high, i.e its decentralization is low.

Yup, looking to define such a benchmark and use it to score some currencies, couldn't find one yet either Smiley

I'm thinking something similar to this, look at the minimum number of people who could 51% attack the currency, and compare it to the number of users of the currency.

So for example, if Bitcoin is controlled by 4 mining pools and has 25 million users, then it's decentralization benchmark is 25 million / 4 = 6.25 million

So for Bitcoin, it'd have a decentralization score of '1 in 6.25 million' and the lower that number, the more decentralized the currency.

Alternatively, could be 1/6.25 million = 1.6e-7 aka 0.0000007 but not sure that number would be as meaningful to most. If I did that multiplying by 2 might make sense so perfect decentralization is every user is equal mining power.

Thoughts? Fair way to do it?

Thanks.