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Decentralization in Bitcoin and Ethereum Networks

Conference paper
First Online:
Part of the Lecture Notes in Computer Science book series (LNCS, volume 10957)

Abstract

Blockchain-based cryptocurrencies have demonstrated how to securely implement traditionally centralized systems, such as currencies, in a decentralized fashion. However, there have been few measurement studies on the level of decentralization they achieve in practice. We present a measurement study on various decentralization metrics of two of the leading cryptocurrencies with the largest market capitalization and user base, Bitcoin and Ethereum. We investigate the extent of decentralization by measuring the network resources of nodes and the interconnection among them, the protocol requirements affecting the operation of nodes, and the robustness of the two systems against attacks. In particular, we adapted existing internet measurement techniques and used the Falcon Relay Network as a novel measurement tool to obtain our data. We discovered that neither Bitcoin nor Ethereum has strictly better properties than the other. We also provide concrete suggestions for improving both systems.

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Notes

Acknowledgements

The authors thank Vitalik Buterin and the anonymous reviewers for their feedback on earlier drafts of this manuscript. Ittay Eyal is supported by the Viterbi Fellowship in the Center for Computer Engineering at the Technion. This work was partially funded and supported by AFOSR grant F9550-16-0250, NSF CSR-1422544, NSF CNS-1601879, NSF CNS-1544613, NSF CCF-1522054, NSF CNS-1518779, NSF CNS-1704615, ONR N00014-16-1-2726, NIST Information Technology Laboratory (60NANB15D327, 70NANB17H181), Facebook, Infosys, and IC3, the Initiative for Cryptocurrencies and Smart Contracts. This material is based upon work supported by the National Science Foundation Graduate Research Fellowship Program under Grant No. DGE-1650441. Any opinions, findings, and conclusions or recommendations expressed in this material are those of the authors and do not necessarily reflect the views of the National Science Foundation.

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Copyright information

© International Financial Cryptography Association 2018

Authors and Affiliations

  1. 1.Initiative for Cryptocurrencies and Contracts (IC3)IthacaUSA
  2. 2.Computer Science DepartmentCornell UniversityIthacaUSA
  3. 3.Electrical Engineering DepartmentTechnionHaifaIsrael

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