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A community member asked for updated Nakamoto Coefficient set of scores.  The Nakamoto Coefficient is a measure of decentralization that was first proposed by Balaji Srinivasan in 2017. It is calculated by dividing the total number of nodes in a network by the number of nodes that would need to be controlled in order to disrupt the network. A higher Nakamoto Coefficient indicates a more decentralized network. It is the best Quant method there is to measure. 

Here is the updated list.  Takeaways are

1) we place a lot of value on true decentralization

2) DOT is top of the list (only one asset is better and that is Bitcoin but not included in the SCPs

3) Note ETH....ADA has a better score thanks to their incredible staking pools supported by Youtubers (Ben Cowen has 3 massive ones, Rob from DAN has 2, etc)

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Comments

Anonymous

Thanks for the update

Anonymous

Dot is very peculiar…highest nakamato coefficient and always one of the highest developers chains…no one uses it…what is the end game there?

Anonymous

Do you have plans for new collabs with Ben and Rob?. I miss you all on the show

Anonymous

DOT feels like the beta max story. High standards, good tech, solid coefficient but will probably go nowhere because of no adoption.

InvestAnswers

the issue is between Rob and Ben they own 5 HUGE ADA Staking Pools so their audiences are ADA heavy - and I think ADA is not gonna make it and their leader Charles H is a sociopath... so net net their audience could not stand me :D

Anonymous

Id like to see an episode of you, rob, guy and Ben. You 4 are the ones I watch consistently for "not financial advice"

Anonymous

What's interesting/noteworthy is that Solana is approximately HALF the age of Polkadot, when measured from launch date, and Solana's score is almost exactly HALF of Dot's. You might ask, so what? Well, everybody else is not in the top-2 and are trailing with larger deltas and, the trailing big names all older than SOL! 😮

Anonymous

Would be interesting to graph the numbers as a function of time, i.e. where are they trending? Which chains are getting more decentralised and which are getting less?

Anonymous

Dear James, could you provide commentary on the SOLBTC chart please? 💥

Anonymous

Or BTCUSD/SOLUSDT 🙏💥

Anonymous

Is the description of the Nakamoto Coefficient in this post correct?

Anonymous

I don't get that Ben is so BTC heavy in mindset and then fcks around with ADA, what kind of logic is this. He will find out.

Anonymous

Bitboy seems to think that DOT is doomed if the news gets out about Gavin Wood & a lewd act with a child in the past

Anonymous

I do not understand this chart.

Anonymous

https://nakaflow.io/ seems to suggest it's a little more complicated than that.

Anonymous

I thought DOT was dead. And how do you mean Ben Cowen and Dan have Staking pools. They rum staking pools? One can stake funds into their pools?

Anonymous

Hi James, apparently XCH (Chia) has a higher Nakamoto coefficient than DOT. Please check it out and adjust your list if correct? Thank you.

Anonymous

“Calculating the Nakamoto Coefficient is as much of an art as a science; it can be difficult to identify if, for example, any two nodes are being secretly run by one party, and various factors (such as node geography and cloud service provider) can affect the calculation” Correct me if I’m wrong, but one example here is that the Solana foundation runs several nodes of their own.

JE

Just a brilliant NC doesn't mean the asset should be invested in. You need decent DAU and other factors.

JE

Lol is it worth mentioning if it is not yet on the list? Market cap rank 4000?

Anonymous

😝 Where was Solano on the list when James first identified it?

Anonymous

It was security, decentralisation but low TPS…. And yes, very young still…. What interests me is they turning it into a public company and have followed the SEC guidelines thus far, it has a very different business model to other cryptos, hence would love James thoughts on it