Endex: Degree of Mining Power Decentralization for Proof-of-Work Based Blockchain Systems

Abstract

Proof of Work (PoW) is one of the key consensus mechanisms for blockchain systems to ensure trust and secure service. The PoW process, which is also known as mining, is computationally intensive, because the miners need to solve a well-crafted puzzle to add a new block to the chain. With cryptocurrency such as Bitcoin becoming more popular, it requires greater levels of mining power for successful mining. Most miners tend to join specific mining pools to share rewards contributed by their mining power. This leads to more centralized PoWbased blockchain systems, which contradicts the design goal of decentralization for blockchain. Mining power concentration may damage the trust and secure level of blockchain systems. However, no tools or studies could timely and quantitatively tell us how decentralized in terms of mining power the PoW blockchain system is. in this article, we design a decentralization index, called Endex, to efficiently quantify the degree of mining power decentralization and timely capture the abnormal phenomena of PoW blockchain systems. We then validate the effectiveness and accuracy of Endex over real mining datasets of four popular blockchain systems. The empirical study demonstrates that Endex can well capture the changes in mining power for these blockchain systems and detect in time the abnormal incidents such as double spending attack and hard fork.