CRYPTOCURRENCIES. CONCENTRATED DECENTRALIZATION

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The network infrastructure of various cryptocurrencies is not so decentralized. This is the result of a study of a group of scientists from the Cornell University and the Israeli Technion. The level of decentralization that can be achieved by the example of Bitcoin and Ethereum was measured. The study showed that there is a concentration of calculations in pools, which play the role of “supernodes.” In this case, three to four nodes control 50-60% of the calculations in the network. The researchers revealed that there are more nodes in the Etherium network than in Bitcoin. The reason is that more Bitcoin nodes are located in data centers (56%) than Etherium (28%). This is a purely centralized structure, where “power” is concentrated in the hands of several players. Ideal decentralization would be possible only if each miner worked as an individual node on the network.

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