Quantifying Decentralization – news.21.co

The primary advantage of Bitcoin and Ethereum over their legacy alternatives is widely understood to be decentralization. However, despite the widely acknowledged importance of this property, most discussion on the topic lacks quantification. If we could agree upon a quantitative measure, it would allow us to:Measure the extent of a given system’s decentralizationDetermine how much a given system modification improves or reduces decentralizationDesign optimization algorithms and architectures to maximize decentralizationIn this post we propose the minimum Nakamoto coefficient as a simple, quantitative measure of a system’s decentralization, motivated by the well-known Gini coefficient and Lorenz curve.

Source: Quantifying Decentralization – news.21.co