Many Bitcoiners maximalists express whenever they can that Ethereum is very centralized. But, the reality is a little different. Why is Ethereum (ETH) not as centralized as we think?
In a recent article we expressed that the inequality in Ethereum was impressive, at least in the numbers. Ethereum’s top 10,000 addresses control 83% of all tokens in the second most important crypt currency of all.
These 10,000 addresses represent 0.01% of all active ETH wallets. But, as we well know this does not mean that only 10,000 people control this large amount, which represents more than $22 billion.
How many ETHs are there at the main addresses of the Ethereum?
Why is Ethereum not as centralized as we think?
Ethereum, unlike other cryptosystems, has one fairly unique feature. Since ETH brought with it the technology of the Smart Contracts.
The reason why ETH’s distribution seems so centralized is because of this technology.
Let us propose as an example, it is WETH where we deposit ETH Bitcoin Circuit Review, Crypto Cash Review, Bitcoin Revolution Review, Bitcoin System Review, Crypto Trader Review to obtain Wrapped Ether for any use of ERC20 technology. Or CryptoKitties in its moment of glory some years ago.
This use of projects that are built on the basis of Ethereum technology is what makes the distribution of ETH seem biased.
Ethereum projects receive $25 million in grants
What happens if we remove the Smart Contracts?
If we say, that makes it seem biased the amount of ETH that some wallets have. Then, let’s eliminate the Smart Contracts and see how the second crypto behaves of all. Isn’t Ethereum as centralized as we think?
The top 10k have 57.2 million Ethereum or 56.7%. Down from 83%.
The top 1,000 addresses have 42.5M.
And the top 100 have 26.4 million.
While the centralization of Ethereum still seems like an exaggeration, it is now closer to the nature of the 1% we see in the traditional world.
But, equally, we cannot say whether this number demonstrates centralization, if we compare it to similar cryptom currencies. Is the Ethereum really so centralized?
If we take into account Bitcoin, which is the world’s first cryptomone currency. And at the same time, we eliminate the Smart Contracts, we can notice that the game board changes completely, and already the maximalist Bitcoiners don’t have much to say.
The top 10,000 Bitcoin addresses have 10.54 million BTCs or 57.44% vs. 56.7% ETH.
16 Ripple addresses (XRP) dominate more than 55.2% of this crypt.
1100 wallets of BCH hodl 56.8%.
In BSV 1250 hodl 55.6%.
Litecoin (LTC) number is 300 wallets hold 54.3%.
This means that in reality, Ethereum is the most decentralized of the top 6 most important crypto currencies.
Why is Ethereum not as centralized as we think? Because, in reality, it’s not as centralized as the others.