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Balaji introduced the Nakamoto Coefficient several years ago:

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.

He also tried to perform an initial analysis of the coefficient for:

bitcoin:

enter image description here

and ethereum:

enter image description here

What's the Nakamoto Coefficient for Cardano? Charles regularly claims Cardano is (among) the most decentralized cryptocurrencies in the world - has anyone tried to quantify that?

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this graphs show the nakamoto coefficient and mav factor epoch by epoch

https://datastudio.google.com/u/0/reporting/3136c55b-635e-4f46-8e4b-b8ab54f2d460/page/p_9vyfu6gorc

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    Wow that's amazing. If I'm reading this correctly (which I might not be since it's new to me) the graph represents the Nakamoto coefficient when looking just at stake pools. As I understand the concept of the coefficient, it should look at the ecosystem as a whole. For example, there might be many stake pools but they all run the same software and maybe that software is highly centralized in some way. Do you know if there's a more holistic measure of the Nakamoto Coefficient for the ADA ecosystem? Jan 31 at 16:43
  • You are correct, see the interesting CIP-50 define k-effective. github.com/michael-liesenfelt/CIPs/blob/…
    – ccgarant
    Apr 22 at 0:10

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