Nakamoto Coefficient
A single number measuring how many independent entities must be defeated to take control of a decentralized network.
The Nakamoto Coefficient answers a simple question: how many independent actors controlling a network does it take before that network can be compromised? It is measured per subsystem.
How it’s computed
For mining or staking, you rank the largest pools and count how many must be compromised to exceed 50% of validation power. The same idea applies to full nodes, client diversity, and developer teams. A higher number means more decentralization; a score of 1 means a single entity already controls that layer.
Why W3D uses it
The coefficient converts vague “is it decentralized?” debate into an objective, repeatable metric. It feeds the governance and software pillars of every W3D Terminal audit — and it’s the most-cited measurement in our methodology.
Related terms
Decentralization, Consensus Mechanism, Proof of Stake, Node