Decentralization in Bitcoin and Ethereum: analysis
Initiative group of Cornell University (IC3) shared results of the recent research "Decentralization in Bitcoin and Ethereum". The research reviews the issue of the above mentioned cryptocurrencies, considering their nodes, resistance to attacks and сonsensus level.
"Bitcoin nodes generally have higher bandwidth allocated to them than Ethereum." Since the previous study in 2016, the median bandwidth for a Bitcoin node has increased by a factor of 1.7x. This allows "to clear almost twice as many transactions per second while maintaining the same level of decentralization." As concerning disk requirements, storage and CPU’s consumption improved inversely: expanses decreased and disk has more room.
"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."— sum up the authors. Only 28% of Ethereum nodes can be identified by datacentres, while the same index for bitcoin is 56%. Both Bitcoin and Ethereum mining are very centralised. Together they control more than 50% of the hash rate.
"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 result, less of Ethereum's hash power goes towards sequencing transactions, and some is wasted on uncles. "This indicates that Ethereum would greatly benefit from a relay network, such as Falcon or FIBRE for Bitcoin. Relay networks ferry blocks quickly among miners and full nodes, and help reduce wasted effort by reducing uncle and orphan rates."
Mining rewards are more unpredictable for smaller miners in Bitcoin as its blocks are unfrequent, compared to those of Ethereum.
The authors added that the high level of consensus is not always Blockchain’s merit but Sybil attacks’, and level of consensus in charge of safety might seem higher that it actually is.
Data had been collected with the use of Falcon Relay Network.