Ketsal Proposes Toolkit for Measuring 'Decentralization'

Oct 21, 2020 at 13:00 UTCUpdated Oct 21, 2020 at 13:20 UTC.A New York law firm is trying to test blockchain projects' decentralization claims against their perhaps not-quite-so-distributed realities.

Called the "Ketsal Open Standards" rubric, the toolkit, developed by the Ketsal law firm and revealed exclusively to CoinDesk, proposes using hard, measurable data points to either bolster or burst a blockchain's decentralized credentials.

Finding that key, said toolkit co-creator and Ketsal partner Josh Garcia, can help investors, security researchers and even securities regulators root out blockchain projects' sometimes bogus claims.

Garcia and co-author Jenny Leung's Open Standards is hardly the first decentralization measurement toolkit.

Thirty-three data points probe the hard facts behind blockchain decentralization.

Ketsal's framework proposes weighing the network's GitHub statistics, measuring inter-node communication times, determining how large a stake of the cryptocurrency rests in wallets - and even the theoretical cost of mounting a 51% attack, among others.

Compiling these statistics can help researchers better understand a blockchain's in-the-moment distribution even if reaching an up-down verdict on its decentralization is impossible, said Garcia.

"If people can decide whether or not some of these metrics are valid," they can use their chosen set to test for the type of decentralization they're looking at.

For one, mining power concentration, or the concentration of miners whose computational efforts cryptographically secure proof-of-work blockchains, is a critical benchmark for any decentralization hawk.

If all the key miners are geographically concentrated or grouped into a single pool, a blockchain may face mounting centralization and security risks, according to Ketsal.