Cryptocurrency Egalitarianism: A Quantitative Approach

Dimitris Karakostas, Aggelos Kiayias, Christos Nasikas, Dionysis Zindros

Research output: Chapter in Book/Report/Conference proceedingConference contribution

Abstract / Description of output

Since the invention of Bitcoin one decade ago, numerous cryptocurrencies have sprung into existence. Among these, proof-of-work is the most common mechanism for achieving consensus, whilst a number of coins have adopted “ASICresistance” as a desirable property, claiming to be more “egalitarian”, where egalitarianism refers to the power of each coin to participate in the creation of new coins. While proof-of-work consensus dominates the space, several new cryptocurrencies employ alternative consensus, such as proof-of-stake in which block minting opportunities are based on monetary ownership. A core criticism of proof-of-stake revolves around it being less egalitarian by making the rich richer, as opposed to proof-of-work in which everyone can contribute equally according to their computational power. In this paper, we give the first quantitative definition of a cryptocurrency’s egalitarianism. Based on our definition, we measure the egalitarianism of popular cryptocurrencies that (may or may not) employ ASIC-resistance, among them Bitcoin, Ethereum, Litecoin, and Monero. Our simulations show, as expected, that ASIC-resistance increases a cryptocurrency’s egalitarianism. We also measure the egalitarianism of a stake-based protocol, Ouroboros, and a hybrid proof-of-stake/proof-of-work cryptocurrency, Decred. We show that stake-based cryptocurrencies, under correctly selected parameters, can be perfectly egalitarian, perhaps contradicting folklore belief.
Original languageEnglish
Title of host publicationInternational Conference on Blockchain Economics, Security and Protocols (Tokenomics 2019)
EditorsVincent Danos, Maurice Herlihy, Maria Potop-Butucaru, Julien Prat, Sara Tucci-Piergiovanni
PublisherSchloss Dagstuhl - Leibniz-Zentrum fuer Informatik, Germany
Pages7:1-7:21
Number of pages21
ISBN (Print)978-3-95977-108-5
DOIs
Publication statusPublished - 31 Dec 2019
EventTokenomics, International Conference on Blockchain Economics, Security and Protocols: First edition - Salle Jean Jaurès of Ecole Normale Supérieure, Paris, France
Duration: 6 May 20197 May 2019
Conference number: 1
http://tokenomics2019.org/

Publication series

NameOpenAccess Series in Informatics (OASIcs)
PublisherSchloss Dagstuhl - Leibniz-Zentrum fuer Informatik
Volume71
ISSN (Electronic)2190-6807

Conference

ConferenceTokenomics, International Conference on Blockchain Economics, Security and Protocols
Abbreviated titleTokenomics 2019
Country/TerritoryFrance
CityParis
Period6/05/197/05/19
Internet address

Keywords / Materials (for Non-textual outputs)

  • blockchain
  • egalitarianism
  • cryptocurrency
  • economics
  • proof-of-work
  • proof-of-stake

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