CryptoGlobe recently reported on the findings of a Cornell University professor whose research deemed Ethereum to be more decentralized than Bitcoin. By using a methodology which counts the nodes of each of the two top cryptocurrencies and relying on the criterion of ownership (whether or not the nodes are owned by businesses which might also run mining operations), the findings of Prof. Emin Gur Sirer clearly suggest that Ethereum is more decentralized.
However, simple reasoning and basic facts still proclaim Bitcoin as the single most decentralised cryptocurrency. As a fellow academic with a degree in political science, it is my duty to deconstruct the methodology and point out to the neglected aspect of the analysis. Because ultimately, even Ripple could be determined to be more decentralized if its individual users started running "validator" nodes, even though the central authority behind the coin owns almost 60% of the supply and arbitrarily makes decisions on behalf of the project.
Bitcoin is Immutable
When Ethereum had undergone the DAO hard fork, it set a dangerous precedent that users will keep on referencing in order to lobby for their financial interests. Whenever a major ICO scam, or smart contract bug occurs, angry investors pressure Vitalik Buterin, the Ethereum Foundation, and every other person of influence who might be associated with the developers. They hold up the DAO hard fork as an example of reversibility, this is one of the biggest weaknesses of Ethereum: it can be pressured by third parties and eventually suffer censorship.
Bitcoin relies on the good old "code is law" principles and doesn't face such problems. Everyone who makes a transaction knows that it's immutable, and that's one of the aspects which gives the coin value: governments can't pressure controlling parties to confiscate coins or intervene in arbitrary ways, just like they would do if they dealt with a bank. Equal status by virtue of code is a quality of Bitcoin which definitely adds up to its superior decentralized status. Would the Ethereum Foundation protect its users if a government demanded to intervene for various reasons? It's highly unlikely.
Foundations = Centralisation
Bitcoin can't even have a proper foundation that's acknowledged by all community members, and has a hard time reaching consensus for protocol modifications. IN the context of decentralization as a way of resisting censorship, then this is a great quality to have. Bitcoin's attempt to standardize decision-making was pretty underwhelming. As a matter of fact, the New York Agreement was the spark which ignited so many heated debates that ultimately the block size remained unchanged. Adopting SegWit was the result of long and passionate arguments which eventually split the community, and the Lightning Network is still pretty divisive. Nevertheless, the Bitcoin Foundation isn't responsible for the Bitcoin Core software updates, and every detail has to be discussed among community members for months.
Ethereum might have more nodes that are owned by private individuals, but the decision-making regarding the upgrades revolves around a pretty authoritarian model where only a handful of people make the final call. This doesn't mean that Bitcoin doesn't have its own influencers, but their relevance and importance are contextual. It's all about developing the technology in the best way possible, and the fact that Satoshi Nakamoto doesn't get in the way to impose his vision is a great advantage.
The Ethereum Foundation is the most influential institution which has complete authority and control over the coin, and their model of governance can sometimes mean that decisions can be made against the will of the community. Among them you can find the switch to a Proof of Stake system, - which will not sit well with miners who have sunk millions of dollars into hardware - the debate around the idea of replacing the maximum supply, and the entire road to Metropolis. It's all arbitrary and pretty centralized.
Bitcoin upgrades are optional, while Ethereum pushes you to keep up
If you don't like SegWit or the Lightning Network and have a strong desire to use transactions on the main chain just like Satoshi intended, you're free to do so. If you run an older version of the Bitcoin protocol, you can still make use of your coins and transactions are recognized on the network. Conversely, Ethereum is much more restrictive and authoritative with its protocol. Miners and nodes are forced to run upgrades if they want to carry on their activity on the network, and sometimes the system is pretty disorganized.
Therefore, Bitcoin is more decentralized from a political point of view which concerns the individuals from the community, but also from a software protocol perspective. Changes are always more democratic and require more intensive sessions of debate, and the perpetual state of distrust among community members is actually productive for the conservation of decentralization. You might concentrate mining into specific places around the world where the electricity cost is cheap and you might entrust the production of such machines to a selected elite, but the protocols and the politics are strict, divisive and always passionate. It's no wonder that the Bitcoin and the Bitcoin Cash supporters engage in such heated debates despite agreeing on 99% of the issues. For better or worse, factionalism and pluralism are core elements of the Bitcoin and Bitcoin Cash debate, ultimately contributing to Bitcoin’s decentralisation and anti-fragility.
On the other hand, the Ethereum community seems to have a sort of blind trust in the vision of Vitalik Buterin and his entourage. The DAO hard fork caused a mutiny which saw the community was split between the immutability supporters, Ethereum Classic and the current Ethereum.
ICOs = Centralisation
Much of Ethereums value is derived from its true ‘killer DApp’, the ICO. Without the ICO rally of 2017 Ethereum would not have seen such an appreciation. The price of Ethereum when it is not being led by bitcoin is highly correlated with the ICO market. A dangerous relationship to have when the majority of COs are considered securities by the SEC. In fact, even Ethereum can be considered a security, whether or not the SEC will go after Ethereum is another matter.
If governments and the international banking system want to shut Bitcoin down, they will run operations to punish mining operations and deter transactions. As there is no creator – despite Craig S. Wright’s claims – there is no centralised weakness. Bitcoin is the only cryptocurrency of ‘virgin birth’.
No Cryptocurrency Will Ever Be As Decentralized As Bitcoin
Satoshi Nakamoto, whomever that might be, was wise enough to leave the stage and empower a community of volunteers to take over the project, find their own motivations. The US Founding Father James Madison was a big fan of factionalism and thought that allowing multiple powers to clash creates consensus and maintains a healthy evolution for a free establishment. This type of laissez-faire governance - which you can also find to a lesser extent within the Litecoin community - is responsible for the constant rise in value we've seen throughout the last 9 years. The idea of internet money that cannot be censored thanks to a strict protocol that everyone respects is way more inviting than a complex coin which does more but is governed by a selected elite (regardless of their intentions).
In a nutshell, I think I've made my point about the statement of Prof. Emin Gun Sirer. His methodology is flawed and clearly biased towards the technical aspects that do favour Ethereum. It's the equivalent of looking at the Russian internet, noticing that downloading from torrents is not punished by law, and concluding that their network is more free and lesser regulated than the internet in the United States. It completely neglects the political arguments, the functioning of the governing organizations, and other important protocols. It's just like saying that Ripple is decentralized just because anyone can run a node and become a witness.
I may not possess the same technical understanding as cryptocurrency expert and computer scientist Emin Gun Sirer, but that doesn't mean that I should refrain from pointing out the obvious in logical and methodological terms: Bitcoin is the most decentralized cryptocurrency we will ever have.