Which Cryptocurrency is Most Decentralized?

One of the key features of a digital currency is its decentralization. Before now all financial assets were controlled by a single authority, usually by country's central bank. Now, we have the technology that allows everyone to perform any operations with financial assets without any barriers and intermediaries. This characteristic has drawn the attention of many "powerful" people. It is a brilliant idea to have assets that central bank cannot control, isn't it?

What is the most decentralized cryptocurrency now?

For a long time, people thought that it was Bitcoin. A recent research performed by professors from Cornell University has questioned this theory. Emin Gun Sirer and Robert van Renesse together with Adem Efe Gencer from LinkedIn figured out that Ethereum, the second cryptocurrency by capitalization, is more decentralized now. As a result of studying and analyzing the nodes of the two networks based on the time delay and geographic location, it was found that the Ethereum nodes are more distributed than Bitcoin. The report, entitled "Decentralization in Bitcoin and Ethereum," states that the nodes of the second network are better distributed among countries, and fewer are located in the data centers. "This is partly due to a larger percentage of Bitcoins is in data centers. For example, Ethereum only has 28% of such nodes while the corresponding indicator for Bitcoin is 56%. If the nodes are in the data centers, this indicates a higher level of corporatization. It can also be a sign that some nodes are deployed in such a way that the real number is distorted for one or another purpose, "the document says. Also, scientists examined both networks from the processing power and mining perspective.

The conclusion is this: both Bitcoin and Ethereum are equally "not particularly decentralized." As Sirer writes, this is due to the concentration of the mining pools and data centers responsible for most of the hash capacity. "Like Bitcoin, the top three Ethereum miners control more than 50% of the hashrate. The entire blockchain technology for both systems is in less than 20 mining companies. Thus, we see that more research is needed to promote the development of censorship-resistant and at the same time energy-efficient consensus protocols, "he concluded. It is worth noting that the comparison of two completely different networks, perhaps, was not the most correct decision by scientists. The thing is that Ethereum is not only a more experimental project than Bitcoin but also a network that has a completely different blockchain. More researchers have to be done on this topic to confidently say which currency is the most decentralized.