Measuring Decentralization Across Leading Blockchains

Decentralization is one of the most common claims in the digital asset market, but it is also one of the least precisely defined. A blockchain may have thousands of nodes and still depend on a few hosting companies. Its token may trade globally while ownership or governance remains concentrated.

A 2026 paper¹ from ARK Invest and Glassnode attempts to replace that vague label with a spectrum. Instead of asking whether Bitcoin (BTC ), Ethereum (ETH ), or Solana (SOL ) is decentralized, it examines how each network distributes verification, block production, governance, infrastructure, and ownership. The resulting comparison offers investors a more useful way to evaluate blockchain risk.

Bitcoin emphasizes inexpensive verification and geographic resilience. Ethereum occupies the middle ground, combining programmability with more operational complexity. Solana favors speed and coordinated execution, but requires specialized professional infrastructure. No architecture is universally superior. Each must be judged against what the network is expected to do.

Why Blockchain Decentralization Matters to Investors

Decentralization is not merely a philosophical preference. It determines how difficult it is for an actor to censor transactions, rewrite history, change monetary rules, or disrupt network access.

A sufficiently decentralized blockchain can provide digitally enforced property ownership without permission from a bank, company, or government. That protection is credible only when no small group can alter the ledger, control validation, or impose a protocol change.

This connects network design with investment risk. A blockchain settling high-value assets may require exceptional resistance to interference. A consumer network processing inexpensive transactions may prioritize speed and capacity. Both can be useful, but they offer different guarantees.

Four Features Define the Decentralization Spectrum

The paper begins with four broad design features: auditability, security, governance, and ownership distribution.

Auditability describes whether ordinary participants can verify the blockchain independently. Full nodes download network data, check transactions against protocol rules, and reject invalid blocks. If operating a node is inexpensive, more users can verify the system without relying on an intermediary. If verification requires costly enterprise hardware, that capability becomes concentrated among professional operators.

Security concerns the distribution of block-producing power. Bitcoin miners contribute computing power, while Ethereum and Solana validators commit staked tokens. The relevant issue is not simply the number of participants, but how much influence is controlled by the largest pools, validators, or staking services.

Governance determines how rules change. Bitcoin has a slow process involving developers, miners, node operators, and users. Ethereum coordinates multiple teams through core developer discussions. Solana has historically relied on more concentrated leadership, enabling faster coordination but greater organizational dependence.

Ownership distribution measures how widely a network’s native asset is held. This has particular importance in proof-of-stake systems because ownership can translate into validator influence. Large holders can stake more tokens, collect more rewards, and potentially compound (COMP ) their share of network power.

Bitcoin Prioritizes Independent Verification

Bitcoin’s strongest advantage is the relatively low cost of running a full node. The paper estimates the necessary hardware at $289, compared with $730 for Ethereum and $21,478 for Solana. A Bitcoin node can operate on consumer equipment, allowing individuals to verify the supply, transaction history, and consensus rules for themselves.

This accessibility reinforces Bitcoin’s monetary policy. Its 21 million coin limit persists because independent participants enforce the same rules and would reject incompatible changes. Altering it would require broad coordination among stakeholders whose incentives generally favor preserving scarcity.

Bitcoin also has a geographically resilient node network. According to the paper, approximately 63% of visible Bitcoin nodes use Tor or otherwise obscure their location, while only around 16% operate in data centers. This makes the network more difficult to map, regulate, or interrupt through a small number of hosting providers.

The compromise is limited base-layer throughput. Bitcoin’s conservative architecture supports roughly seven transactions per second. It is optimized less like a high-volume application platform and more like a settlement network designed to preserve an auditable monetary record.

Ethereum Balances Distribution and Programmability

Ethereum sits between Bitcoin and Solana across most measures. Its smart contracts support a large application ecosystem, but that functionality increases the computational burden of verification.

Running an Ethereum full node remains achievable, although it requires more storage, memory, and technical knowledge than Bitcoin. Ethereum also benefits from multiple execution and consensus clients. Client diversity reduces the risk that one defective implementation could compromise most of the network.

Its transition to proof-of-stake introduced a different concentration risk. Operating a solo validator requires 32 ETH, which places direct participation beyond the reach of many users. Staking pools and liquid staking protocols improve accessibility, but they aggregate deposits and influence. The system becomes easier for smaller investors to use while relying more heavily on shared infrastructure.

Ethereum’s seven years as a proof-of-work network helped distribute ETH before staking began. Consequently, its ownership structure is more dispersed than Solana’s but more concentrated than Bitcoin’s, according to the paper.

Solana Trades Accessibility for Performance

Solana takes the clearest performance-first approach. Its parallel processing architecture can handle far more activity than Bitcoin’s base layer, making it attractive for trading, payments, gaming, and other applications that depend on speed and low transaction costs.

That capacity comes with substantial infrastructure requirements. The paper estimates that an operational Solana node requires enterprise equipment costing more than $21,000. Reconstructing its historical chain is even more demanding, with an estimated five-year total cost approaching $94,000.

Professional infrastructure is part of Solana’s design. The network assumes hardware will continue improving and uses that progress to expand performance. Consequently, ordinary users are less able to verify it independently, while data centers and hosting providers assume greater importance.

Solana nevertheless has meaningful validator participation. Its reported Nakamoto coefficient, which estimates the minimum number of independent participants needed to disrupt consensus, exceeds those of Bitcoin and Ethereum in the paper. This illustrates why decentralization cannot be measured using a single statistic. Solana can have a distributed validator set while remaining concentrated in hardware access, hosting, and token ownership.

Comparing the Networks Using the Paper’s Data

More functionality and throughput generally raise verification costs. Higher costs reduce direct participation and can create dependence on specialized operators.

A Better Framework for Evaluating Blockchain Investments

Investors should avoid collapsing decentralization into a leaderboard. Instead, they can ask what must remain distributed for a particular investment thesis to work.

• Can ordinary users verify the network without a third party?
• How many entities can disrupt block production or finality?
• Do hosting providers create identifiable points of failure?
• Who can coordinate upgrades or change economic rules?
• Does token ownership reinforce control over consensus?

This approach exposes hidden dependencies. Thousands of validators may use the same cloud provider. A widely traded token may be held largely by custodians or early investors. An open-source protocol may still depend on a foundation for funding and direction.

Conversely, some concentration may be an intentional price paid for performance. The central question is whether users and investors understand the compromise and whether the network remains suitable for the assets and applications built on it.

Investing in the Infrastructure Connecting Blockchain Networks

These competing blockchain designs are creating demand for infrastructure that can connect users and institutions with multiple networks. Coinbase Global (COIN ) offers one publicly traded route to that broader digital asset ecosystem. It operates trading, custody, staking, payments, and developer infrastructure. Coinbase Prime combines execution, financing, custody, and staking, while Base extends the company into onchain applications through an Ethereum Layer 2 network.

This makes Coinbase relevant to all three architectures discussed in the paper. Activity involving Bitcoin, Ethereum, Solana, stablecoins, and onchain applications can generate demand for services that help individuals and institutions access those networks.

Coinbase also demonstrates the tension at the center of blockchain adoption. Decentralized protocols frequently rely on centralized exchanges, custodians, and staking providers to reach mainstream users. That positioning can create a durable business opportunity, but it also exposes shareholders to crypto market cycles, regulation, custody obligations, cybersecurity threats, and fee competition. Coinbase should therefore be viewed as infrastructure exposure to digital asset adoption, not as a direct substitute for owning any individual token.

Decentralization Is a Set of Tradeoffs, Not a Label

The most important lesson from the ARK Invest and Glassnode analysis is that blockchain design involves choices. Bitcoin sacrifices throughput to keep verification affordable and monetary rules difficult to change. Ethereum accepts greater complexity to support programmable applications while working to distribute clients, validators, and governance. Solana relies on powerful infrastructure and coordinated development to deliver substantially higher performance.

Those differences should shape valuation and risk analysis. A network designed to protect long-term monetary scarcity should be judged differently from one optimized for consumer-scale applications. Investors who understand what is decentralized, what remains concentrated, and why those decisions were made are better positioned to distinguish durable infrastructure from attractive marketing.

References:

^{1. Puell, D., Hadi, R., & CryptoVizArt. (2026). The decentralization spectrum: Design tradeoffs in digital assets. ARK Investment Management LLC and Glassnode.}