We have been conducting a longitudinal study of the state of cryptocurrency networks, including Bitcoin and Ethereum. We have just made public our results from our study spanning toin a peer-reviewed paper about to be presented at the upcoming Financial Cryptography and Data Security conference in February [1]. Bitcoin nodes generally have higher bandwidth allocated bitcoin being decentralized them than Ethereum. Compared to our previous study inwe see that the median bandwidth for a Bitcoin node has increased by a factor of 1.
The typical Bitcoin node has much more bandwidth available to it than it did before. Higher allocated bandwidth indicates that the maximum blocksize can be increased without impacting orphan rates, which in turn affect decentralization.
If people were happy about the level of decentralization inthey should be able to increase the block size by 1. Some people argue that increasing the maximum block size would also prohibitively increase CPU and disk requirements. Yet these costs were trivial in the first place, especially compared to today's transaction fees, and have come down drastically.
To date, we have seen no sound, quantitative arguments for any specific value of the maximum block size in Bitcoin. Arguments bitcoin being decentralized this topic have consisted of vague, technical-sounding-yet-technically-unjustified argumentation, bereft of scientific justification.
The dissonance between the technical-soundiness bitcoin being decentralized the arguments and the actual technical facts on the ground is disconcerting for a technological endeavor [3].
Compared to Ethereum, Bitcoin nodes tend to be more clustered together, both in terms of network latency as well as geographically. Put another way, there are more Ethereum nodes, and they are better spread out around the world. That indicates that the full node distribution for Ethereum is much more decentralized.
Part of the reason for this bitcoin being decentralized that a much higher percentage of Bitcoin nodes reside in bitcoin being decentralized. Nodes that reside in datacenters may indicate an increased level of corporatization. They may also be a bitcoin being decentralized of nodes deployed to skew node counts for various different implementations a. The entire blockchain for both systems is determined bitcoin being decentralized fewer than 20 mining entities [4].
While traditional Byzantine quorum systems operate in a different model than Bitcoin and Ethereum, a Byzantine quorum system bitcoin being decentralized 20 nodes would be more decentralized than Bitcoin or Ethereum with significantly fewer resource costs.
Of course, the design of a quorum protocol that provides open participation, while fairly bitcoin being decentralized 20 nodes to sequence transactions, is non-trivial. Thus, we see that more research is needed in this area to develop permissionless consensus protocols that are also energy efficient. Ethereum has a much higher uncle rate than Bitcoin's pruned block rate. This is by design, as Ethereum operates its network closer to its physical limits and achieves higher throughput.
As a bitcoin being decentralized, however, less of Ethereum's hash power goes towards sequencing transactions than Bitcoin's. Put another way, some hash power is wasted on uncles, which do not help carry out directly useful sequencing work on the chain.
Relay networks ferry blocks quickly among miners and full nodes, and help reduce wasted effort by reducing uncle and orphan rates. Fairness is an important metric: If a system is perfectly fair, there would be fewer reasons for miners to pool their resources into larger, cooperating pools that operate in unison.
To measure fairness, we looked at the proportion of blocks that miners have on the main chain divided by the proportion of their blocks that did not help advance the blockchain, namely, pruned blocks and uncles. In an ideal system, this metric would be equal to 1. The level of fairness in both systems is, roughly speaking, comparable.
But there is a big difference in variance of fairnesswith Bitcoin exhibiting high variance. That is to say, mining rewards bitcoin being decentralized more unpredictable for smaller miners in Bitcoin. This is partly because the high block rate in Ethereum helps provide many more opportunities for the laws of large numbers to apply in Ethereum, while Bitcoin, with its infrequent blocks, can exhibit much more uncertainty from month to month.
The full details, of how we measured the data and what we found in more precise terms, are in our paper. Gencer is a researcher at LinkedIn. His thesis research focused on improving the scalability of blockchain technologies.
Soumya Basu is a graduate student at Cornell University. His research interests span the bitcoin being decentralized aspects of blockchains and cryptocurrencies. My Research Interests are distributed systems and algorithms, specifically distributed storage algorithms, the distributed aspects of Bitcoin, and reliable aggregation in distributed sensor networks. Hacker and professor at Cornell, with interests that span distributed systems, Bitcoin being decentralized and networking.
Decentralization in Bitcoin and Ethereum bitcoin ethereum Monday January 15, at Bitcoin Underutilizes Its Network Bitcoin nodes generally have higher bandwidth allocated to them than Ethereum. Ethereum is Better Distributed Than Bitcoin Compared to Ethereum, Bitcoin nodes tend to be more clustered together, both in terms of network latency as well as geographically.
Bitcoin being decentralized contrast, Ethereum nodes tend to be located on a wider variety of autonomous systems. More The full details, of how we measured the data and what we found in more precise terms, are in our paper. Footnotes [1] Our study examines solely the networks and the blockchain maintained by those networks.
It does not examine development centralization. Balaji Srinivasan and Leland Lee have developed a metric, called the Nakamoto Coefficientthat bitcoin being decentralized to capture centralization across different fields. Our personal experience was more drastic than the industry average, closer to a 2X drop in price over the same time frame. And some people will claim that pools provide decentralization, because they are composed of multiple independent actors.
This argument is incorrect for a few reasons: In short, pools providing any level of decentralized decision making bitcoin being decentralized more aspirational talk than a proven reality.
Our study examines solely the networks and the blockchain maintained by those networks. Historical price data is notoriously difficult to find, for some bitcoin being decentralized. Concomittantly, Bitcoin Core has adopted a narrative that it is a Store of Value, in effect making it explicit that the token is not a technological artifact meant to facilitate payments, but an investment vehicle where early adopters are compensated by late comers.
Of course, some of bitcoin being decentralized entities are pools.
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