The new (and dramatic) arrival of the EOS blockchain is starting to turn many heads in the Ethereum space. As they both try to tackle the same problem of creating decentralized applications (DAPPs), consumers and customers wondering what the differences are between the two platforms.
This article will try to put the question, “which is more decentralized: Ethereum or EOS?” to rest. I will try to break down the differences with real live numbers to show this.
Spoiler alert — they both have different components that are more decentralized than the other.
This article is part of a much larger comparison of EOS and Ethereum that I am undertaking, please follow my medium or twitter to get the next articles (smart contract comparison, and an overall technical comparison):
Medium: https://medium.com/@theblockstalk
Twitter: https://twitter.com/theblockstalk
I will compare the current Proof of Work (POW) Ethereum network with the Delegated Proof of Stake (DPOS) EOS network. I will also speculate about the soon Proof of Stake (POS) Ethereum network. It will not consider sharded POS Ethereum as it’s too hard to speculate at this stage. This article will try to keep things “real”, meaning that I will not try to set expectations based on what could be, but what they are right now or what will (99% sure) be.
Decentralized metrics
The data in this table is was collected on 16 October 2018.
- https://www.ethernodes.org/network/1/nodes
- https://etherscan.io/stat/miner?range=7&blocktype=blocks
- https://eosnetworkmonitor.io/
- https://eoscorearbitration.io/
- https://medium.com/eos-new-york/the-state-of-eos-governance-ecaf-regarbiter-401c073d622d
- https://etherscan.io/accounts
- https://eosflare.io/whales
- https://forums.eosgo.io/discussion/744/design-goals-of-the-eos-arbitration-forum
- https://medium.com/@decanus/meditations-on-eos-f74790dc45ac
- https://medium.com/huobi-global/huobi-talk-ep-36-explosive-discussion-between-eos-block-producers-ecaf-ram-block-one-voting-eda99765a38d
- Information that I personally gathered from block producers and representatives from Block.one throughout several EOS events in London
Nodes
The number of nodes contributing to the network operation. The number of full nodes in the system is a fairly rough estimate. Needless to say, there are many for both networks, but an order of magnitude more for Ethereum.
The most important part of the network operation is the creation of new blocks. In Ethereum, mining pools dominate the scene and the top 3 have more power than the rest of the miners.
In EOS, there are 21 block producers who create blocks in a consensus in which 15 of the 21 block producers must agree on a block for it to be final. The distribution of votes between these producers is fairly even (varies slightly) and is what determines who gets to produce blocks. As such we see that about half the block producers produce half the blocks.
Token distribution and voting
EOS tokens are able to be used in the EOS blockchain to vote for who the block producers are. As the block producers operate the network, EOS tokens are indirectly linked with the block producing distribution. As an example, an EOS account with a 50% of the EOS tokens can choose who 50% of the who block producers are. The block producers still need to operate within consensus (15 of 21) to create blocks.
In Ethereum, Ether does not play any role in the production of blocks, yet!
In the POS implementation of Ethereum the distribution of Ether will be directly linked with the ability to produce blocks. As an example, an Ethereum account with 50% of the Ether could create 50% of the blocks.
EOS has significantly worse token distributions than Ethereum. This is an indirect concern that could affect the decentralization of block creation. Ethereum’s token distribution is also not great, which may (but may not) directly affect the decentralization of the Ethereum’s block creation.
Off-chain dispute resolution
Part of the EOS blockchain is a system for resolving disputes based on Ricardian contracts between users. This includes disputes with block producers, as well as DAPP providers. When a dispute case is closed, the blockchain is modified by block producers according to the resolution. This action can only be done if a block producer consensus is achieved which is 15 of 21 producers.
The dispute system goes through the EOS Community Arbitration Forum (ECAF), with arbitrators assigned to cases that help resolve the dispute. The arbitrators work on a free market, but the selection of who is allowed to arbitrate is currently done in a semi-centralized way through ECAFs. The plan with EOS is to have the arbitration system backed by a court of law, selected in one country. This would allow legal action to be pursued between EOS users if they were still not happy with the arbitration results.
Ethereum does not have a system for off-chain dispute resolution. If a transaction executes with undesired effects, it cannot be undone.
Which is more decentralized
The metrics and explanations above have been the source of information to create the below breakdown. This breakdown is according to Vitalik Buterin’s The Meaning of Decentralization categorization.
Architectural
“How many physical computers is a system made up of? How many of those computers can it tolerate breaking down at any single time?”
Both Ethereum POW and POS have strong architectural decentralization as they have lots of companies operating nodes, including block creating nodes. If nodes fail or leave the network there are many others to replace them and this happens instantly without any loss of service.
EOS has strong architectural decentralization. There are less full nodes at the moment, and this could be because of its maturity. If a block producer (one of the 21) fails or leaves the network permanently then a standby producer will take its place, but this does not happen automatically for 24hrs, if the block producer consistently tries to manipulate the system then users will have to vote them out to stop them from producing blocks. If the block producer leaves temporarily then the network will recover quickly when the next block producer takes over. In both cases, there is a reduction in the EOS blockchain service for small periods of time.
Political
”How many individuals or organizations ultimately control the computers that the system is made up of?”
#On-chain
Both Ethereum and EOS have centralized weakness points for on-chain centralization.
There is a direct centralization in Ethereum POW due to mining pools, with three operators controlling over half the blocks created. This may decrease with the implementation of POS, as there are lower barriers for entry and a fairer game for those wishing to make blocks. In POS, the token distribution is fairly centralized (but less than EOS) which plays a direct role on block production so this could cause equal centralization.
EOS has better block creation decentralization, with a fairly even power split between 21 producers. On-chain EOS decentralization is weakened by the very centralized EOS token distribution. This can indirectly affect the power split between block producers.
#Off-chain
Dispute resolution for contracts and DAPPs on the EOS network go through a semi-centralized new and experimental forum.
Logical
“Does the interface and data structures that the system presents and maintains look more like a single monolithic object, or an amorphous swarm?”
Both EOS and Ethereum behave as one system, with one interface and so are both logically centralized.
Conclusion
Ethereum and EOS both have components that are more or less centralized than the other.
Ethereum has more centralized block creation due to mining pools. When moving to POS this may become less centralized but this is not certain.
EOS is more decentralized in block creation, but this can be altered due to a centralization of voting power. EOS has centralized weakness in its off-chain dispute resolution system, which is still in an experimental phase.
There are many other factors to consider for a blockchain other than it’s level of decentralization to determine it’s value. This article is not meant to compare the two blockchains overall value, for that please wait for my overall article that breaks down all the components of each blockchain.
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