An Information Entropy Method to Quantify the Degrees of Decentralization for Blockchain Systems

Wu, Keke; Peng, Bo; Xie, Hua; Huang, Zhiguo

doi:10.1109/iceiec.2019.8784631

Cited by 24 publications

(25 citation statements)

References 3 publications

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“…[32] Srinivasan defined decentrality using Gini coefficient and Lorenz curve; and observed that systems unintentionally may move to centrality. [8] Wu et al proposed an entropy-based method to quantify the decentralization for Bitcoin and Ethereum. Using the information entropy, they measure the discrete degrees of blocks mined and address balances (of the miners) to quantify the degrees of decentralization for Blockchain systems.…”

Section: Papersmentioning

confidence: 99%

“…A Blockchain is more centralized if it has a smaller N and incurs a small centralization if N is large. Hence, a public chain's central [8], proposed an entropy method to quantify the decentralization for Bitcoin and Ethereum. Using the information entropy, they measure the discrete degrees of blocks mined and address balances to quantify the degrees of decentralization for Blockchain systems.…”

Section: B Decentralitymentioning

confidence: 99%

“…Later, Buterin [7] used Baran's work as a framework to discuss the meaning of decentrality in a Blockchain system. Decentralization in distributed systems refers to the fact that there is no central point of control among distributed and connected peers or nodes [8]. It ensures that no single user or a group of users could control a system's assets or impose changes which other users don't consent to.…”

Section: Introductionmentioning

confidence: 99%

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Measuring Decentrality in Blockchain Based Systems

et al. 2020

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Blockchain promises to provide a distributed and decentralized means of trust among untrusted users. However, in recent years, a shift from decentrality to centrality has been observed in the most accepted Blockchain system, i.e., Bitcoin. This shift has motivated researchers to identify the cause of decentrality, quantify decentrality and analyze the impact of decentrality. In this work, we take a holistic approach to identify and quantify decentrality in Blockchain based systems. First, we identify the emergence of centrality in three layers of Blockchain based systems, namely governance layer, network layer and storage layer. Then, we quantify decentrality in these layers using various metrics. At the governance layer, we measure decentrality in terms of fairness, entropy, Gini coefficient, Kullback-Leibler divergence, etc. Similarly, in the network layer, we measure decentrality by using degree centrality, betweenness centrality and closeness centrality. At the storage layer, we apply a distribution index to define centrality. Subsequently, we evaluate the decentrality in Bitcoin and Ethereum networks and discuss our observations. We noticed that, with time, both Bitcoin and Ethereum networks tend to behave like centralized systems where a few nodes govern the whole network.

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Section: Papersmentioning

confidence: 99%

Section: B Decentralitymentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Measuring Decentrality in Blockchain Based Systems

et al. 2020

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“…The whole network has no central hardware or mechanism, which is the core advantage of blockchain. Decentralization is a key selling point of most public blockchain platforms [84]. Decentralization removes the existence of intermediaries and reduces the cost of intermediaries, which makes blockchain widely used.…”

Section: A Blockchain Advantagesmentioning

confidence: 99%

“…It can better maintain the stability and security of the entire blockchain system [85].  Trust-free: Trust-free is to remove the third-party trust [84], which is manifested in two aspects: one is to trust the authenticity of the historical behavior of the data on the chain; the other is to trust the future behavior constrained by rules and mechanisms.  Traceability: traceability means that the data on the chain can be found.…”

Section: A Blockchain Advantagesmentioning

confidence: 99%

Focus on Blockchain: A Comprehensive Survey on Academic and Application

et al. 2020

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As a decentralized distributed ledger, blockchain has developed rapidly since its birth and has been highly valued by governments, academia, and industry. Start in the financial field, blockchain technology has been rapidly applied to various fields such as the Internet of Things, supply chain, and healthcare. Blockchain technology has made sufficient development and innovation, but it also faces many challenges, such as security, scalability, and waste of resources. This paper starts with the development history of blockchain and combines the characteristics and technical principles of it to analyze the current academic research status and application scenarios. Meanwhile, this paper analyzes the existing outstanding blockchain projects and elaborates on their key advantages and current challenges. With discussing the ongoing development trend of blockchain, the development direction, and the research trend of blockchain in the future, this paper provides a useful reference for related research.

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Comparison of Decentralization in DPoS and PoW Blockchains

Palanisamy

2020

Blockchain – ICBC 2020

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Decentralization is a key indicator for the evaluation of public blockchains. While existing works have evaluated the degree of decentralization in Proof-of-Work (PoW) blockchains represented by Bitcoin and Ethereum, there have been few studies on measuring the actual level of decentralization between PoW blockchains and blockchains powered by other decentralized consensus protocols. This paper presents a comparison study of the level of decentralization in Bitcoin and Steem, a leading Delegated-Proof-of-Stake (DPoS) blockchain. In Bitcoin, miners with higher computational power generate more blocks. In contrast, blocks in Steem are equally generated by witnesses while witnesses are periodically elected by stakeholders. Our study analyzes the process of stake-weighted election of witnesses in the DPoS consensus protocol and measures the actual stake invested by each stakeholder in Steem. We then quantify and compare the actual degree of decentralization in these two blockchains by computing the Shannon entropy of the distribution of computational power among miners in Bitcoin and the distribution of invested stake among stakeholders in Steem. Our measurements indicate that, compared with Steem, Bitcoin tends to be more decentralized among top miners but less decentralized in general. Our study is designed to provide insights into the current state of the degree of decentralization in representative DPoS and PoW blockchains. We believe that the methodologies and findings in this paper can facilitate future studies of decentralization in other blockchain systems employing different consensus protocols.

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An Information Entropy Method to Quantify the Degrees of Decentralization for Blockchain Systems

Cited by 24 publications

References 3 publications

Measuring Decentrality in Blockchain Based Systems

Measuring Decentrality in Blockchain Based Systems

Focus on Blockchain: A Comprehensive Survey on Academic and Application

Comparison of Decentralization in DPoS and PoW Blockchains

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