#explain-card The [[Nakamoto coefficient|Nakamoto Coefficient]] is a fundamental metric for evaluating the decentralization of blockchain networks. Named after [[Bitcoin]]'s pseudonymous creator [[Satoshi nakamoto|Satoshi Nakamoto]], this metric represents the minimum number of entities that would need to collude to disrupt the network's operations. A higher Nakamoto Coefficient indicates greater decentralization and network resilience. For example, a coefficient of 7 means at least 7 different entities would need to cooperate to potentially censor transactions or execute a 51% attack. This metric is particularly important for assessing: - [[Proof of stake|Proof of Stake]] networks (by [[Validator|validator]] stake distribution) - [[Proof of work|Proof of Work]] networks (by mining pool distribution) - Governance systems (by voting power distribution) To calculate the Nakamoto Coefficient: 1. Identify the critical subsystem being measured (mining, validation, governance) 2. Determine the minimum threshold of control needed (typically 33% or 51%) 3. Rank all participants by their share of power/stake 4. Cumulatively add the largest participants until reaching the threshold 5. The number of participants at this point is the Nakamoto Coefficient You can explore real-time Nakamoto Coefficient data for various blockchains at [NakaFlow.io](https://nakaflow.io/), which provides up-to-date metrics for supported chains.