Bitcoin Forum

I don't understand why Bitcoin is more decentralized than Ethereum even though you operate a full node with both.

To create the blocks:
Bitcoin PoW = miners
Ethereum PoS = Validator

With Bitcoin/Ethereum Full Node you can verify the blocks from the miners/validators.

So the only point why Bitcoin is more decentralized than Ethereum is:
The Bitcoin Full Node is cheaper than the Ethereum Full Node ?

Or is it the case with Ethereum that you cannot verify the blocks as a full node but only as a validator?
So:
Bitcoin miners create block / full nodes verify the block
Ethereum validator create block / validator also verify the block

It is because the proof of work concept is highly diversified, impossible to launch 51% attack so Bitcoin seems highly decentralized where as Ethereum is now running based on Proof of stake which involves the block validation process only by the validators.

Full node has nothing to do with the decentralization because it only verifies the data of blockchain so if one is trying to tamper the data it will eliminate from the network so higher the number of nodes will ensures the tamper proof netwotk.

Again the answer depends on the validation process since bitcoin runs based on Proof of Work concept in that miners compete to solve complex mathematical puzzles using computational power. This competition requires substantial computational resources, such as specialized hardware and electricity. As a result, PoW networks tend to attract a larger number of participants who contribute their resources to secure the network. This distributed participation helps in achieving a higher degree of decentralization.

Proof of Work vs. Proof of Stake: understanding the key differences (https://interestingengineering.com/innovation/difference-between-pos-and-pow)

If talking about decentralization, do not compare bitcoin with ether. Ether even gone more centralized.

Some ether were premined.
PoS makes it more centralized.
Ethereum developers want to reduce validators, making it more centralized (they want to make people that can be a validator to have at least 2048 ETH. It is still 32 ETH but they are working to increase it).
Ether is influenced more by developers like Vitalik Buterin, no one knows Satoshi Nakamoto.

What makes you conclude that? Do you have any data on the cost of running a full node for each network? One of the critical issues is understanding what parts you include in the word "decentralized". If you draw a conclusion just from whether you can run a full node or not, then the issue would be ambiguous since almost any coin allows you to do that. How would you differentiate between Bitcoin and other blockchains owned by some governments if the latter also allows you to run your own node then? Are you going to call them decentralized too?

I believe you can see what other factors you should consider from the answers shared above. The consensus mechanism, how it launched, who controls the repository, who can participate, and so on are one of those things. If you don't agree that those factors are important, then I guess no one can convince you that Bitcoin is more decentralized than others.

_act_ summed it up well. It's absurd to compare Bitcoin and Ethereum about decentralization.

They sold premined ETH with ICO. Bitcoin never do that.
Vitalik Buterin is a known figure and have the biggest influence over the market, even for other coins. Bitcoin don't have this type of figure.
They even roll back and forked the coin. Ethereum isn't even in their original chain, Ethereum Classic is.
Switching from PoW to PoS is a hit about decentralization.

Ethereum has its benefits, but it's impossible to talk about decentralized ETH anymore.

But whether all miners get together and carry out a 51% attack or all validators get together for a 51% attack is basically the same, it is possible with both

Does that mean that Ethereum would be just as decentralized as Bitcoin for a validator?

However, Vitalik does not have the only power over Ethereum, here are too voting takes place as with Bitcoin.
In addition, with Bitcoin there are only a few programmers who add the suggestions in the source code.

Well, just that the Bitcoin Blockchain is 500GB in size and the Ethereum Blockchain 14TB makes it more expensive

For me, decentralized means:
That I have control over my bitcoins, that a government cannot take them away from me or someone blacklists my bitcoins so that I can no longer use them.
To me it also means that bitcoin is not under the control of a single party who can decide what to do with it and what not.
It has to be democratic.

For me Bitcoin is decentralized, but I wonder if it is also Ethereum.
If the only reason is that it's PoW vs. PoS then to me Ethereum is also decentralized.
If it's because Satoshi went into hiding and Vitalik didn't, then for me Ethereum is also decentralized on that point.

Maybe it's just a matter of faith like religion, some believe in Bitcoin, others in Ethereum and some in both or neither

As my understanding goes Bitcoin is more decentralized, the reason being:

• Bitcoin has a more extended history
• Large number of nodes & miners
• Bitcoin ecosystem being resilient against centralization

While Ethereum Governance is questionable?

I think the word decentralization in this context means more, decentralization is also a form in which there no central authority that decides the fate of the coin. And in the case of Ethereum the validators which are the highest stakers of the coin have this central power because once two or more of them actually pull out then it could mean the end of that coin or even affects its value.



Why do still say that Ethereum is decentralized even after it been run on POS method. The layer of a blockchain actually satisfies if it is centralized and with POS giving space to just the highest stakers then it is centralized already, not like POW were any one with enough computational power can come in. After the merger 50% of Ethereum was even reported (https://zerocap.com/insights/articles/has-ethereum-become-more-centralised/#:~:text=In%20most%20cases%2C%20decentralisation%20is,rather%20than%20contributing%20mining%20power.) to be owned by just few wallets, aren’t these owners the manipulators already? Does a coin that has manipulators decentralized? If yes then was the difference with fiat currency?

And yes Vitalik is also a threat to Ethereum, this doesn’t need much explanation but just look at how every threat towards CZ puts Binance in a bind always

Reading how the op unpacks the term decentralization, I think I understand why the question was posed. Bitcoin is more decentralized than Ethereum, but in aspects different from those pointed out as important by the op. Both Bitcoin and Ethereum have non-custodial wallets, so you can have control over your coins. And I guess the op is right that Buterin isn't the only one in the decision-making process regarding the future of Ethereum
But PoS encourages a more centralized ownership of coins than PoW because those who already have a lot of Ethereum are given even more Ethereum, whereas with Bitcoin, miners and rich Bitcoin addresses can be two completely different things.

To be clear Ethereum was centralized even when it was using the PoW algorithm. In fact we could say it was centralized from its inception and we had a lot of simple and very obvious hints. From the 72 million premined ethers before it was even released to the biggest disgrace any cryptocurrency can have with the centralized authority controlling ethereum rolling back blocks just because they lost some money in a gamble called DAO.

The move to PoS was the last nail in Ethereum's coffin that proved it has always been a centralized shitcoin. The recent decision to centralized the validators even more by significantly increasing the amount needed to be locked is just kicking an already dead horse.

You probably need to learn the basics. I also suggest reading the blog made by a person who calls himself "StopAndDecrypt". His writings are technical, but easy enough to read for newbies to learn and understand.

Here's one of writings that's relevant for the topics that you're asking about, https://medium.com/@StopAndDecrypt/266c136fc55d#aee4

You'll learn what nodes actually are, scaling, and other related topics that all Bitcoiners should know/have a minimum level of understanding.

Yes Bitcoin is more decentralized and it's not even close. Bitcoin could be considered the only highly decentralized cryptocurrency.


A few reasons:

1. Ethereum had a premine sale of like over half the Ethereum in existence. This means founders not only made a ton of money off their premine, but the founders and a handful of wealthy initial investors own a bunch of the Ethereum (just like VCs own most of the shares of a stock thanks to being able to invest before an IPO). Bitcoin, on the other hand, has always been issued by mining which it is much more equitable way to issue the coins.


2. The fact that Ethereum had a big premine is made far worse by the fact that Ethereum is now proof of stake so that owning of supply and validation of transactions are no longer separate but are one in the same, giving founders and initial investors much more power over creating blocks.

3. Also PoS just in general made Ethereum much more centralized because it is a less secure system than PoW. Now only is there the centralizing fact in #2 above with those who got the premine, but just in general with PoS, as said in #2, validation of transactions is no longer separated from ownership like in PoW, so large owners of ETH now can have more sway over creation of blocks. This is made much much worse by the fact that, unlike some other PoS cryptos, it is hard to stake ETH (32 ETH minimum, having to run a staking node, worrying about getting slashed if you're not online - hell, even Vitalik himself said he finds it difficult to run a staking node!!) so that most people reasonably are going to use staking services by a handful of companies. This has made it so most of the ETH staked is staked by a handful of companies, greatly compromising the security against a 51% attack. With Bitcoin their is no such centralization of mining.

4. Also because you now earn newly mining ETH through ownership, those with the most ETH are gonna earn more and many of them were probably already rich so they are less likely to be selling ETH rewards for income every once in a while like most people will probably do. PoS is a system kinda like fiat where the rich keep getting richer - specifically meaning that those with a lot of ETH are the ones that get more new ETH. This is not how the Bitcoin system works, you don't get more Bitcoin simply from owning lots of Bitcoin.

5. Even before Ethereum moved to PoS, it was already far less decentralized than Bitcoin. Bitcoin is much more popular, many more miners on the network, much. more hash power, many more full nodes running the network. On ETH running a full node (I think they are called Archival nodes or something like that) has always been hard and very resource intensive. There are wayyyyy fewer full nodes on Ethereum than on Bitcoin. In fact, a few years ago something like a third of the entire Ethereum network went down when Amazon's AWS had an outage, because running an Ethereum node all on your own is so hard that many of the people who even manage it use Amazon's cloud services to help out. A cloud infrastructure provider going down knocking out a third of Ethereum is the opposite of decentralized!

6. Finally, Bitcoin is controlled by no one. Ethereum is controlled by the Ethereum foundation, and Vitalik himself has a lot of control over the network. The network essentially does whatever Vitalik and crew decide to do. Hard forks aplenty. This is the opposite of decentralization. Bitcoin on the other hand is an open source project with maintainers of the code and updates to the protocol are all down through backwards compatible soft forks and only if the vast majority of the network agrees to the changes. so the power control structure of Ethereum is verrrryyyy different are far more centralized than Bitcoin.



Ethereum was already far less decentralized than Bitcoin both were PoW. PoS has made Ethereum much more centralized. That doesn't mean something bad is going to happen to Ethereum, but it does mean Bitcoin is a much more stable and secure platform than Ethereum.

But also we must understand that these two cryptocurrencies are very different. Bitcoin is global money, so being a fully globally decentralized and secure network is of utmost importance for Bitcoin. Anything less than that would mean it is not good money. Ethereum, meanwhile, is not money, but an app network with ETH being the base token for the app network. And it's apps are all quite centralized anyways, and there isn't even anything popular on Ethereum yet. So Ethereum being fairly centralized isn't a huge problem as long as it can at least not have 51% attacks (which again, are far more likely than they are on Bitcoin). But if Ethereum ever grows to be a big economy of apps, with major applications and a lot of commerce done within its ecosystem, then Ethereum's centralization becomes a problem. Ethereum doesn't need to be highly decentralized like Bitcoin because ETH isn't money, but if a lot of economic activity starts happening in the future within Ethereum's application network Ethereum's lack of decentralization could become a problem.

Yes, both are theoretically possible. Now let's imagine that someone decided to take control of Ethereum and began to secretly buy coins in order to start controlling enough of them. Once he got them under his control, nothing more can be done, because who controls more coins, the same and more influences the network. Including when voting for soft forks.

If someone has collected enough hardware under their control to control bitcoin, at any moment someone else plugs in even more hardware, and control disappears. There is no way to establish a monopoly in almost any way.

This is one of the reasons why Bitcoin is more decentralized than Ethereum.

Beyond decentralization, this is what makes bitcoin apart from the rest of the market. Bitcoin was created with the intention of being a peer-to-peer currency, Satoshi did not intend to create bitcoin to be a profitable tool like altcoins, but we made bitcoin an investment asset. Meanwhile, ETH and all altcoins are created for the purpose of creating tokens and raising capital. Obviously, their original goal was to turn them into speculative assets, so it's not hard to see why they've become so centralized.

Let's assume if someone wants to execute 51% attack over bitcoin network then they approximately need 181 EH/s of hashing power it is equivalent to hash power produced by 1 Million powerful ASICs so imagine it will need around 10B dollars for the product cost alone and then the operating cost which will be like another 5B and they have to keep running the ASICs to keep their control over bitcoin network, once they stopped all the blocks reversed will be confirmed again so its like they just wasted billions to hold the network for a while so its like they need unlimited amount of money to take control of bitcoin forever.

If it is executed on the Ethereum network then the attacker needs 10M ETHs staked which is around 20B and if once the attacks start then a voting process needs to be taken to reverse those validated blocks (correct me if I am wrong guys).

Bitcoiner2023  so both are decentralized however you can differentiate which one is impossible to attack than the other.

You’re not going to get a better, more detailed response than the above. Superb piece of writing, thecodebear.

It is near impossible to successfully attack bitcoin, it is the most decentralised form of money in the world. Satoshi was a genius who will go down in history as one of the greatest innovators of all time.

Technically, it is. Bitcoin never had ICO and there were no premined sales. But there is a nuance. But what about the early miners and investors, now called whales, who mined, bought, or otherwise accumulated a lot of BTC? Unequal distribution among the owners of bitcoin still exists (ever since), which is not entirely correct from the point of view of decentralization.

Although the comparison of ETH and BTC I think is completely redundant, because BTC undoubtedly wins by a huge score against ETH in terms of decentralization. In general, and not only in this.

For any cryptocurrencies that have public representatives of the project, like Vitalik Buterin, they are a weak spot. They can change the direction in the market not only of their project, but of the entire cryptoindustry as a whole with their statements alone. Of course, this is a clear minus for decentralization.

With Bitcoin, too, not everything is so simple. What about Bitcoin Cash? It's also a forked coin. At this point, there are similarities between ETH and BTC, right?

Absolutely.

It was impossible to talk about decentralization ETH initially. Since the inception of the project.

Ethereum is currently transitioning to Proof of Stake (PoS), where validators are selected based on the amount of cryptocurrency (ETH) they hold and "lock up" as collateral.  Chosen validators are responsible for validating transactions and creating new blocks.  Since participating as a validator requires a significant amount of ETH, some argue that PoS could lead to more centralization in the hands of those with large amounts of ETH.

this is an issue i'm interested in and am looking into it, maybe the price of bitcoin is 10 times more expensive than eth. It is also possible that bitcoin does not have a founder, a team as clear as ETH

Bitcoin hashrate is very high and decentralized from mining pools to geolocations.

Blocks found by mining pools: https://www.blockchain.com/explorer/charts/pools
Bitcoin mining map: https://ccaf.io/cbnsi/cbeci/mining_map
Bitcoin reachable nodes: https://bitnodes.io/
Distribution of reachable Bitcoin nodes across leading countries: https://bitnodes.io/dashboard/

Evaluating validator decentralization: Geographic and Infrastructure Distribution in Proof-of-Stake Networks (https://messari.io/report/evaluating-validator-decentralization-geographic-and-infrastructure-distribution-in-proof-of-stake-networks)
64%of staked ETH controlled by 5 entities (https://cointelegraph.com/news/64-of-staked-eth-controlled-by-five-entities-nansen)
You will have more data from the Nansen tweets (https://twitter.com/nansen_ai/status/1569702764661571586)

It is easier to attack Proof of Stake network than Proof of Work network and Bitcoin network is very big and safe against 51% attacks.

While am also a big fan of Ethereum and I fully admire the story of Vitalik Buterin with the fact that ETH is the second on the line after BTC, there is no question that in terms of decentralization, it is BTC that got it all the time. Satoshi Nakamoto understood well the whole process and seemed to me secure the whole network as it plays its role into the future. But of course,  with its PoW algorithm, there are those concern with the immense use of power to make things work in its mining aspect - something which PoS has remedied on.

Bitcoin is definately more decentralized because ETH has more of its POS stakers which are held by the top whales pretty much. Like the above poster said that 64% of staked ETH is held by 5 different individuals. This shows you how unfair the distribution is. Its very expensive to stake ETH yourself due to the large amount of ETH needed.

WIth BTC anyone can mine, even with a laptop, there is no min requirement. You can see its mined in many countries around the world. It requires electricity which is a value commodity and its what makes mining expensive so it makes it secure.

Although on the surface it looks the same, it's actually not. Proof Of Stake is consensus where a Cabal of wealthy holders of the coin are in charge, a consensus inside the system. POW is consensus that's unrestrained by the system.

From what I understand, POS is no different from traditional consensus made up of Oligarchs. They HODL most of the system's wealth, then therefore control the system.

You can't even begin to compare premine with early adopters because there is a difference between an unequal distribution and unfair distribution.

As a rule of thumb if you can find a single unit in a cryptocurrency that YOU couldn't mine, that cryptocurrency has an unfair distribution. But if you can find some coins that YOU chose not to mine that is an unequal distribution not unfair.

That is why premine is unfair, the creator of that shitcoin is the only one who is capable of printing those coins making it unfair and centralized.
One being early or having invested more than others doesn't make it unfair, it just makes it unequal because there was no restrictions or preference being enforced on anybody preventing them from mining any of the bitcoins in circulation starting from block #1 and the very first block reward.

Again you are making a wrong comparison.
The fork that ethereum had was to roll back blocks, which is to effectively remove one of the main principles of cryptocurrencies called immutability of their blockchain. So ETC still is immutable while ETH is not.
On the other hand things like bcash are copies of bitcoin that have nothing to do with bitcoin. They just copied the code and the chain (history) to create a new coin.

You are making wrong comparison here and when a coin is running on PoS network how come we except decentralised concept from it? The validator with more financial power has more control over the network while in bitcoin it's not the case as miners run computation to find the target as nobody has control over network so can we compare them both?

One is fair distribution while the other is just giving more power to someone with more finances and bitcoin runs on complete decentralised concept while ETH has big whales who have control and Vitalik would never loose control of his network.

There are many coins which are just copies of it like many people confuse wBTC also with BTC which is just another shit token on ETH blockchain and have nothing to do with bitcoin at all but people without even checking just make assumptions they are same but it's not the case.

I thought this topic was from a very long time, until I checked the date and I was like, why even ask this question? Because it's not needed, we all know that Ethereum is no longer a proof of work crypto currency and now you comparing Ethereum with Bitcoin feels unfair, the only PoW coin that's still standing is Bitcoin, so case should be closed, Ethereum moved on from Pow a long time ago and it's not coming back from that, even before Ethereum switched to PoS I believe it's not Decentralized like Bitcoin but the finally switch even make things more clearer.

This is not a worthy comparison between the two.

Pos does not fix anything, it simply makes ETH and other coins more centralized.  and the fact is that when mining bitcoin has energy consumption as well as emissions but will be nothing, insignificant compared to other industries in the world.  once you have invested in bitcoin, don't let the fake news released by the government influence you, they always say bitcoin pollutes the environment and bitcoin is a tool for criminals...all just because they hate bitcoin.

Ethereum ceased to become a fully decentralized cryptocurrency the moment it switch from PoW (a true Consensus Mechanism) to immoral/meaningless PoS.

The issue is that Ethereum now requires Network participants to have huge amount of money in form of stakes to take part in full Network consensus... while Bitcoin only requires participants to run full nodes to take part in full Network consensus. What ethereum did is like asking your fellow citizens to download full copy of your country's constitution plus have huge amount of money in order to take part in full governance. Bitcoin requires just having a copy of the constitution to take part in full governance. Judging by this, which between the two do you think will be more decentralized?


It's Important to Note that:
In Proof of Work, Work = Mining. Miners or workers need to prove the work done to nodes before their work is accepted and reward given. Everyone takes part in this, making the network more decentralized.

In Proof of Stake, Stake = Money. Stakers need to prove they own huge amounts of money before they can take part in full network consensus. So you can't be part of full consensus if you don't have the required amount of stake. Very few people qualify for this making the network less decentralized.