Decentralization of Bitcoin Network

A lot of attention is paid to the decentralization of the Bitcoin network.

Bitcoin miners should set up shop in a number of different jurisdictions to prevent regulatory capture of the network. Some members of the crypto community even saw China’s 2021 crypto ban as a positive, as it forced mining operations—which were until then clustered in the Middle Kingdom—to spread out to various continents.

That discourse isn’t as prevalent for Proof-of-Stake networks like Ethereum and Solana. However, the staking firm SenseiNode aims to make such blockchains as resilient as possible by establishing validator infrastructure in Latin America.

> “When we started, 99% of nodes were located in Europe, the US, and some in Asia,” SenseiNode CEO Pablo Larguia told CoinDesk in an interview. “We were the first to bring geographic and jurisdictional decentralization to Latin America.”

With approximately $800 million worth of assets staked through its platform, SenseiNode is the 15th largest staking firm globally. The largest, Kiln, manages over $7 billion in assets.

SenseiNode operates in various Latin American countries, including Brazil, Argentina, Mexico, Chile, Costa Rica, and Colombia. It also has nodes in the U.S. and Germany, utilizing local and regional data centers.

> “Most of the nodes in the US and Europe are hosted in Amazon Web Services. At the end of the day, that’s a point of centralization,” Larguia said.

Data centers in Latin America are typically not as advanced as those in the West. This has required SenseiNode to take on an educational role in some cases to help build the necessary infrastructure for running staking services.

Node Requirements

Requirements for running nodes vary by protocol. For example, older blockchains may have larger storage requirements.

Node costs also differ: it costs about $300 per month to run an Ethereum validator, while a Solana validator costs $800 per month. However, unlike Ethereum validators, there are no limits to how many tokens can be delegated to a single Solana validator. Hence, Ethereum staking is more expensive for SenseiNode than Solana staking.

> “For Polkadot and Avalanche, we have like two or three nodes, but for Ethereum we have around 9,000,” Larguia said.