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In “Quantifying Decentralization”, Balaji S. Srinivasan (the CTO of Coinbase) describes the Nakamoto coefficient - a method beyond the Gini coefficient in measuring how centeralized these networks really are.


"The basic idea is to:

(a) enumerate the essential subsystems of a decentralized system,

(b) determine how many entities one would need to be compromised to control each subsystem, and

(c) then use the minimum of these as a measure of the effective decentralization of the system.

The higher the value of this minimum Nakamoto coefficient, the more decentralized the system is."

These measures only make sense to consider assuming the distribution was fair. Otherwise, the system is unrecoverably compromised from day one as there is no trust-minimised way of telling whether the founders abused their disproportionate privilege to capture enough supply to manipulate the incentives that keep the miners honest and the network secure.

If the security of your network is fundamentally based on trust that one central party was honest, then you can't have decentralisation regardless of how many addresses you have, how many miners you have, how many nodes you have, or how many clients you have.

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