Recent study on Bitcoin and Ethereum decentralization vindicates EOS design

A peer reviewed study examines decentralization of two major cryptocurrencies, Bitcoin and Ethereum. Results suggest that a blockchain secured by 20 nodes, such as EOS, is more decentralized.

Recent study on Bitcoin and Ethereum decentralization vindicates EOS design

EOS is an upcoming blockchain project that promises to have unrivaled scalability for smart contracts running on its platform. Through clever use of parallelization techniques based on Dan Larimer's Graphene technology that powers BitShares and Steemit, EOS will be able to support more than 100,000 transactions per second - more than enough to support NYSE, VISA and cryptokitties on one blockchain.

EOS achieves this impressive scalability through partial centralization of the network using something that's called dPOS - delegated proof-of-stake. While in traditional POS and POW blockchains there are potentially infinite number of nodes who compete to produce a new block, in EOS this number is limited to 21 nodes. 20 nodes will be operated by, the organization behind EOS, and its partners, and one node will be selected by network participants through a voting mechanism.

Ethereum supporters will point out that this setup is way more centralized than Vitalik's ETH blockchain. But is it really? A recent peer reviewed study suggests that EOS might actually have a more decentralized network than Bitcoin or Ethereum.

mining index

Distribution of mining power in Bitcoin and Ethereum networks

The reason for that is that top three miners in Bitcoin and top 4 miners in Ethereum control more than 50% of the total hashrate. The study further proves that a Byzantine quorum system of 20 participants would provide better decentralization in real world than theoretically infinitely-decentralized BTC and ETH.

In my opinion, right now EOS is one of the most undervalued cryptocurrencies on the market and it has a very good chance to grow 20x, surpass Ethereum and become a top-3 cryptocurrency before the end of 2018. I have already said this once about Litecoin, and sure enough the price has since jumped from $81 to $350 all-time-high.

Other findings from the same paper

The study has some more results that could spark one's curiosity.

Bitcoin can safely increase block size by 1.7x

One of the arguments against block size increase, and against the infamous SegWit2x hard fork, was that bigger block size would make the network less centralized because of larger hardware requirements. However, the study shows that since 2016 the majority of BTC full nodes have increased their bandwidth by 1.7x. To put this another way, if people were happy with how Bitcoin was decentralized in 2016 then increasing block size by 1.7x would provide the same level of decentralization as back then.

Maybe if this study appeared earlier we would have successfully hard forked to SegWit1.7x, which would have almost doubled the amount of transactions the network can process without taking a hit on decentralization.

Ethereum is more decentralized than Bitcoin

ethereum is serious business

Bitcoin is serious business. Compared to Ethereum, more bitcoin nodes are clustered together. In other words, Ethereum is better distributed geographically. Only 28% of Ethereum nodes were identified to be running in a datacenter, compared to Bitcoin's 56%. This could be an indicator of increased corporatization of BTC.


No matter what coin your heart supports it's important to regularly revisit your choices and to look at the cryptocurrency's fundamentals. Bitcoin's and Ethereum's biggest assets are branding and decentralization. The study that we've reviewed in this blog post suggests that as time goes by POW based systems have a tendency to become more centralized. Thus, in the future, branding might become the only asset of these digital assets.

EOS, despite choosing a higher level of centralization in the protocol's design, might in practice have higher decentralization than Bitcoin and Ethereum. When you combine this higher degree of decentralization with 100,000 transactions per second throughput you get a blockchain that might take the whole market by a storm.

If you like tokens and want to trade in a truly decentralized platform check out our new exchange Saturn Network which features wallet to wallet one transaction trading and automated token self-listing. As always, don't forget to do your own research, and happy trading!

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