What decentralisation means: seven questions, in order of importance
"Decentralised" is the word every project uses about itself, and it is used as if it were one property a chain either has or lacks. It is several, and they do not move together: a chain can spread its blocks across hundreds of validators that one foundation appointed, or run on twelve thousand nodes while three mining pools find most of its blocks. Seven questions separate the parts, and they are not equally important.
What does decentralisation mean in a cryptocurrency?
That no person or small group can decide what the chain does. In practice it is seven questions: who can produce blocks, who can check them, who can change the rules or stop the chain, how concentrated block production is in practice, who writes the software, who holds the coins, and where the network runs. The first two matter most: if anyone can produce blocks and anyone can check them, the others can be corrected by the people using the chain.
Why the order matters
The questions are ranked by what each one protects. Open block production means no gatekeeper can shut out a producer or decide which payments get in. Open verification means every rule is enforced by the people running the software, so a change to the rules needs their agreement. With both in place, a captured developer team, a concentrated pool or a large holder can be routed around: miners switch pools, nodes refuse a bad release, users run a different client. Without them, no amount of spread elsewhere helps, because someone holds a door that can be closed.
1. Who can produce blocks
The first question is whether anyone may produce blocks, and so issue new coins, without asking permission. Proof of work is open to anyone with hardware; permissionless proof of stake to anyone holding the coin, weighted by the stake. A capped set of validators, producers elected by token holders, or validators admitted by a foundation or council put block production behind a door.
The Grade measures this twice: as the first of the Cryptocurrency Standards (anyone can mint, yes or no) and as the "who can mint" ladder under decentralisation: proof of work first, proof of stake second, hybrid proof of work and stake third, then the other families by market cap, then consensus models not yet classified, and tokens issued by a founder or company last at 0. In a family that mixes open and permissioned variants, such as proof of stake, a chain whose block producers come from a permissioned list loses a point; Hedera, Theta and Polymesh are among them. On 27 October 2026, 57 of the 198 graded coins scored 10 as proof of work.
Open entry and low concentration are different things. XRP's largest validator produced about 2.9% of what the site measured and its three largest 8.6%, a spread most chains would envy, yet only validators the network's lists admit take part, so it scores 5.7 on who can mint, the federated family's place, with no point off, since admission is what that family is. Proof of stake has its own catch: there, holding coins is producing blocks, so holder concentration (question 6) is also concentration of block production.
2. Who can check the blocks
A full node downloads every block and checks it against the rules, whoever produced it. Nodes are what make the rules binding: a producer that breaks them makes blocks the nodes reject. The more independent machines check, the harder it is to change the rules quietly, and the fewer of them there are, the closer the chain is to a single point of failure.
The Grade counts reachable full nodes from a network crawler, or the active validator set where no crawler counts the network, on a logarithmic scale: one node 0, 1,000 or more 10. In October 2026 Bitcoin had 12,138 reachable nodes, Monero 4,984, Litecoin 816, Bitcoin Cash 560 and Dogecoin 490, while TRON is scored on its 27 elected block producers. Collateral slots and validator keys are not nodes, since one operator can hold any number of them. Where no reliable count exists, the criterion is left unmeasured rather than guessed: 84 of the 198 graded coins had a node score.
3. Who can change the rules or stop the chain
A chain can have open block production and still have a party that can halt it, freeze an address, reverse a payment or push a rule change through a governance vote. That is control, and it is the third question: whether any issuer, foundation, company or validator council holds a power over the chain that its users cannot refuse.
The Grade measures it in three places. Two of the Cryptocurrency Standards ask whether an authority can halt the chain or freeze funds, and whether one team controls the software. The record criterion takes a point off for each kind of halt, freeze or reversal in the last five years. BNB Chain and Hedera both fail the freeze check; XRP, TRON, Cardano and Algorand pass it but fail the central-team check.
4. How concentrated block production is in practice
Open entry says who may produce blocks; concentration says who actually does. Most mined coins are mined through pools, and most staked coins through a handful of large staking operators. A pool or operator above half the blocks could rewrite recent history; three together above three quarters could coordinate the same.
The Grade checks both under network security: the largest pool or validator under 50%, and the largest three under 75%. Bitcoin's largest pool found 26% of recent blocks and its top three 63%; Ethereum Classic's top three 81.8%, which fails. This ranks fourth, not first, because pools can be left: the hashrate belongs to miners who point it where they choose, and a pool that misbehaves loses them within hours. A validator set that cannot be joined cannot be left in the same way.
5. Who writes the software
Every node runs code someone wrote. If one company or foundation maintains the only client, it decides what the next release contains, and a bug in it is a bug in the whole network. Several independent clients spread both risks.
The Grade asks whether more than one maintained client exists (a network security check) and whether a single team controls the reference client (a Cryptocurrency Standards check). Cardano's stake is spread across pools that each hold under 1% of blocks, yet one company employs most of the developers of its reference node; Bitcoin Cash has four maintained clients from separate teams.
6. Who holds the coins
How the supply is spread decides who gains from the chain's success, and on proof of stake who produces its blocks. It starts at launch: coins allocated to founders, a company or investors before anyone could mine or stake them are concentrated from the first block. It continues with every developer share taken from block rewards.
The Grade measures the start under issuance (premine, fundraising and the developer share after launch) and plans a holder-concentration scale under decentralisation: the share of supply held by the 100 largest addresses that are not exchanges. That scale is not collected yet, which is why every grade is still marked provisional. It ranks sixth because on a mined chain a large holder cannot change the rules or produce a block by holding; on a staked chain it climbs to the top.
7. Where the network runs
Nodes and validators concentrated in one cloud provider or one country can be switched off or regulated together. It is a real risk and the hardest to measure fairly: a node's address says little about who runs it, and hosting moves faster than any count. The Grade does not score it, and says so.
Where each question sits in the Grade
| Question | Measured by |
|---|---|
| 1. Who can produce blocks | "Who can mint" scale (decentralisation) · "anyone can mint" (Cryptocurrency Standards) |
| 2. Who can check them | Nodes scale (decentralisation) |
| 3. Who can change the rules or stop the chain | No halt or freeze authority, no central team (Cryptocurrency Standards) · halts (record) |
| 4. Concentration in practice | Largest pool or validator under 50%, largest three under 75% (network security) |
| 5. Who writes the software | More than one maintained client (network security) · no central team (Cryptocurrency Standards) |
| 6. Who holds the coins | Premine, fundraising, developer share (issuance) · holder concentration (decentralisation, not yet collected) |
| 7. Where the network runs | Not scored |
The decentralisation group on each asset page holds the three scales (who can mint, nodes, holders); the other questions are checks inside the Cryptocurrency Standards and network security, and each asset page shows every one with its source.
Questions
Is proof of stake decentralised?
It can be open to anyone who stakes, which passes the first question, and many proof-of-stake chains spread their blocks widely. Its difference is that holding coins is producing blocks, so the distribution of the supply, including what founders and investors received at launch, is also the distribution of block production.
Is a chain with many validators decentralised?
Not by that alone. Many validators that a foundation appointed, or that one company's software runs, answer the fourth question and fail the first or the fifth. XRP spreads its blocks widely among validators that must be admitted.
Are nodes and miners the same thing?
No. Miners and validators produce blocks; full nodes check them. A chain can have few producers and many nodes, or the reverse, and the two protect against different things.
Why does the Grade not score where nodes are hosted?
Because no method yet measures it fairly across chains: an IP address says little about who runs the machine, and hosting changes faster than any count. It is listed so a reader knows it is missing.