# Cryptocurrency Egalitarianism: A Quantitative Approach

## TL;DR

This paper introduces a quantitative measure of egalitarianism in cryptocurrencies, compares various consensus mechanisms, and finds that ASIC-resistance and properly configured proof-of-stake can enhance egalitarian participation.

## Contribution

It provides the first formal definition of cryptocurrency egalitarianism and evaluates multiple cryptocurrencies, revealing that stake-based systems can be highly egalitarian with proper parameters.

## Key findings

- ASIC-resistance increases egalitarianism
- Stake-based protocols can be perfectly egalitarian
- Proof-of-work and hybrid systems vary in egalitarianism

## Abstract

Since the invention of Bitcoin one decade ago, numerous cryptocurrencies have sprung into existence. Among these, proof-of-work is the most common mechanism for achieving consensus, whilst a number of coins have adopted "ASIC-resistance" as a desirable property, claiming to be more "egalitarian,"S where egalitarianism refers to the power of each coin to participate in the creation of new coins. While proof-of-work consensus dominates the space, several new cryptocurrencies employ alternative consensus, such as proof-of-stake in which block minting opportunities are based on monetary ownership. A core criticism of proof-of-stake revolves around it being less egalitarian by making the rich richer, as opposed to proof-of-work in which everyone can contribute equally according to their computational power. In this paper, we give the first quantitative definition of a cryptocurrency's \emph{egalitarianism}. Based on our definition, we measure the egalitarianism of popular cryptocurrencies that (may or may not) employ ASIC-resistance, among them Bitcoin, Ethereum, Litecoin, and Monero. Our simulations show, as expected, that ASIC-resistance increases a cryptocurrency's egalitarianism. We also measure the egalitarianism of a stake-based protocol, Ouroboros, and a hybrid proof-of-stake/proof-of-work cryptocurrency, Decred. We show that stake-based cryptocurrencies, under correctly selected parameters, can be perfectly egalitarian, perhaps contradicting folklore belief.