Abstract: The most primary advantage of blockchain networks is to be decentralization. However, despite the widely acknowledged importance of this property, most studies on this topic lack quantification, and none of them performs a measurement on the degree of decentralization they achieved in practice. Entropy is a measure of uncertainty of random variables, that is the measure of randomness of data sets, can be used to measure the degree of decentralization for blockchain networks. In this paper, taking Bitcoin and Ethereum for instances, we propose an entropy method in information theory to quantify the degree of decentralization for them. Using the information entropy, we calculate the degrees of randomness of blocks mined and address balances to quantify the degrees of decentralization for Bitcoin and Ethereum networks, and the results of calculations indicate that Bitcoin’s mining is more approximately 12% decentralized than Ethereum with full samples, and Bitcoin’s wealth is more approximately 9.2% decentralized than Ethereum with 10000 samples. The method proposed in this paper can be used to evaluate the degree of decentralization for any blockchain network.

Key words: blockchain, decentralization, entropy, Bitcoin, Ethereum