According to a study led by Cornell professor Emin Gun Sirer, Cornell research professor Robbert van Renesse, and LinkedIn researcher Adem Efe Gencer, Ethereum’s nodes are better distributed than bitcoin, and thus the network is more decentralized than bitcoin.
The paper entitled “Decentralization in Bitcoin and Ethereum” analyzed nodes in the bitcoin and Ethereum networks based on network latency and geographic locations. Based on the two criteria, the paper revealed that the Ethereum network is more decentralized that as nodes are better distributed internationally and fewer nodes can be identified as being housed in data centers.
“Part of the reason for this is that a much higher percentage of Bitcoin nodes reside in data centers. Specifically, only 28% of Ethereum nodes can be positively identified to be in data centers, while the same number for Bitcoin is 56%,” the paper read. “Nodes that reside in data centers may indicate an increased level of corporatization. They may also be a symptom of nodes deployed to skew node counts for various different implementations.”
Most of the criticism against the Ethereum network from bitcoin developers and experts have been around the network’s supposed inferior decentralization and security measures in comparison to bitcoin. However, the research paper from Cornell revealed that in terms of security and decentralization, Ethereum is either on par or better than the Bitcoin network.
The paper also noted that in terms of computing power and mining, both Ethereum and bitcoin are not “that decentralized.” Sirer noted in his blog post referring to the Cornell study that mining in Ethereum and bitcoin are very centralized, with several mining pools and mining centers accountable for the majority of hash power.
“in Bitcoin and the top three miners in Ethereum controlling more than 50% of the hash rate. The entire blockchain for both systems is determined by fewer than 20 mining entities,” Sirer noted. “Thus, we see that more research is needed in this area to develop permissionless consensus protocols that are also energy efficient.”
But, the centralization of mining in both networks can be refuted based on the premise that individuals miners also contribute to mining pools. The fact that several mining pools are accountable for the majority of hashpower is a non-issue because even if mining pools are compromised, individual miners can easily switch over to new pools or infrastructure by reallocating their computing power elsewhere.
The Ethereum development team and the network’s open-source developer community have a more experimental approach than the bitcoin open-source community, which is more risk-averse. The Ethereum community is often willing to explore new solutions and innovative technologies with risk, while the bitcoin community tends to be more cautious in the development process.
The difference in the philosophy of the two development communities has led to the formation of fundamentally different blockchains. The bitcoin community is currently experimenting with Lightning, a micropayments channel solution, while the Ethereum community is actively developing ZK-SNARKs on Ethereum, Plasma, Sharding, and Casper.