This is one of the most important articles I’ve read all year. I agree that decentralization is multi-dimensional. The most important factors, in my mind, are consensus mechanisms among developers, nodes, and miner dispersion. The academic and investor community is aching for a decent formalization of decentralization.
Some comments:
After a certain threshold of dispersion, centralization in exchanges seems trivial to me. Once regulated, as with Bitcoin, exchanges are unlikely to pose danger to the system.
Ownership is immaterial. In a PoW system, owners with large fractions of the coins doesn’t pose an existential threat.
My feeling on nodes is that cheapness, rather than an arbitrary node/country count is more important. See Paul Sztorc’s great article on measuring decentralization for more on this.
Dev and miner decentralization are the most important parameters, in my mind. Although the dev commits panel might be misleading.
Finally, I want to congratulate you on finding a GINI coeff for bitcoin. No one has done a good job of that so far. I wonder if your figure needs caveats?
Thank you for the post and while imperfect, I am sure it will spur a good debate.
