A Comparative Analysis of Decentralization in Bitcoin, Ethereum, and Solana: Technologies and Challenges

Abstract

This paper presents a comparative analysis of decentralization in Bitcoin, Ethereum, and Solana, three leading blockchain platforms. Bitcoin, the pioneering cryptocurrency, employs a proof-of-work (PoW) consensus mechanism to achieve decentralization through a vast network of miners. Ethereum, originally based on PoW, is transitioning to proof-of-stake (PoS) with Ethereum 2.0, aiming to enhance scalability and reduce energy consumption while maintaining decentralization. Solana, a newer platform, uses a novel proof-of-history (PoH) mechanism combined with PoS to achieve high throughput and low latency, making it a scalable solution for decentralized applications. The analysis examines the technological foundations, consensus protocols, and network structures of each platform, addressing challenges like Bitcoin's mining power concentration, Ethereum's PoS transition complexities, and Solana's validator centralization risks. It also explores future directions for enhancing decentralization, considering technological advancements, regulatory impacts, and community-driven governance. This study provides valuable insights into the trade-offs and innovations shaping the decentralization of blockchain networks, offering guidance for developers, researchers, and stakeholders in the blockchain ecosystem.