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Comparison of Decentralization in DPoS and PoW Blockchains

Published: 18 September 2020 Publication History

Abstract

Decentralization is a key indicator for the evaluation of public blockchains. In the past, there have been very few studies on measuring and comparing the actual level of decentralization between Proof-of-Work (PoW) blockchains and blockchains with other consensus protocols. This paper presents a new comparison study of the level of decentralization in Bitcoin and Steem, a prominent Delegated-Proof-of-Stake (DPoS) blockchain. Our study particularly focuses on analysing the power that decides the creators of blocks in the 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 with different voting power weighted by invested stake. We analyze the process of stake-weighted election of witnesses in DPoS and measure the actual stake invested by each stakeholder in Steem. We then compute the Shannon entropy of the distribution of computational power among miners in Bitcoin and the distribution of invested stake among stakeholders in Steem. Our analyses reveal that neither Bitcoin nor Steem is dominantly better than the other with respect to decentralization. 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 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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Cited By

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  • (2024)Blockchain Takeovers in Web 3.0: An Empirical Study on the TRON-Steem IncidentACM Transactions on the Web10.1145/3689431Online publication date: 21-Aug-2024
  • (2023)Liquid Democracy in DPoS BlockchainsProceedings of the 5th ACM International Symposium on Blockchain and Secure Critical Infrastructure10.1145/3594556.3594606(25-33)Online publication date: 10-Jul-2023
  • (2023)How Hard is Takeover in DPoS Blockchains? Understanding the Security of Coin-based Voting GovernanceProceedings of the 2023 ACM SIGSAC Conference on Computer and Communications Security10.1145/3576915.3623171(150-164)Online publication date: 15-Nov-2023
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Published In

cover image Guide Proceedings
Blockchain – ICBC 2020: Third International Conference, Held as Part of the Services Conference Federation, SCF 2020, Honolulu, HI, USA, September 18-20, 2020, Proceedings
Sep 2020
238 pages
ISBN:978-3-030-59637-8
DOI:10.1007/978-3-030-59638-5

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Springer-Verlag

Berlin, Heidelberg

Publication History

Published: 18 September 2020

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View all
  • (2024)Blockchain Takeovers in Web 3.0: An Empirical Study on the TRON-Steem IncidentACM Transactions on the Web10.1145/3689431Online publication date: 21-Aug-2024
  • (2023)Liquid Democracy in DPoS BlockchainsProceedings of the 5th ACM International Symposium on Blockchain and Secure Critical Infrastructure10.1145/3594556.3594606(25-33)Online publication date: 10-Jul-2023
  • (2023)How Hard is Takeover in DPoS Blockchains? Understanding the Security of Coin-based Voting GovernanceProceedings of the 2023 ACM SIGSAC Conference on Computer and Communications Security10.1145/3576915.3623171(150-164)Online publication date: 15-Nov-2023
  • (2021)SteemOpsProceedings of the Eleventh ACM Conference on Data and Application Security and Privacy10.1145/3422337.3447845(113-118)Online publication date: 26-Apr-2021

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