MUELLER-BLOCH Christoph, ANDERSEN Jonas Valbjørn, SPASOVSKI Jason, HAHN Jungpil
Blockchain systems allow for securely keeping shared records of transactions in a decentralised way. This is enabled by algorithms called consensus mechanisms. Proof-of-work is the most prominent consensus mechanism, but environmentally unsustainable. Here, we focus on proof-of-stake, its best-known alternative. Importantly, decentralised decision-making power is not an inherent feature of blockchain systems, but a technological possibility. Numerous security incidents illustrate that decentralised control cannot be taken for granted. We there-fore study how key parameters affect the degree of decentralisation in proof-of-stake block-chain systems. Based on a real-world implementation of a proof-of-stake blockchain system, we conduct agent-based simulations to study how a range of parameters impact decentralisation. The results suggest that high numbers of initial potential validator nodes, large transactions, a high number of transactions, and a very high or very low positive validator network growth rate increase decentralisation. We find weak support for an impact of changes in transaction fees and initial stake distributions. Our study highlights how blockchain challenges our under-standing of decentralisation in information systems research, and contributes to understand-ing the governance mechanisms that lead to decentralisation in proof-of-stake blockchain systems as well as to designing proof-of-stake blockchain systems that are prone to decentralization and therefore more secure.
MUELLER-BLOCH, C., ANDERSEN, J.V., SPASOVSKI, J. et HAHN, J. (2024). Understanding decentralization of decision-making power in proof-of-stake blockchains: an agent-based simulation approach. European Journal of Information Systems, 33(3), pp. 267-286.