Part 10/16:
The Nakamoto coefficient provides insight into how decentralization is evolving. For example, Ethereum's large stake pools have consolidated, reducing this coefficient and potentially increasing vulnerability. Conversely, networks like Cardano have seen a reduction in their Nakamoto coefficient due to stake pool withdrawals, signaling centralization trends.
Understanding these dynamics is crucial because decentralized networks are often viewed as more resistant to control, regulation, and censorship. If certain blockchains become overly centralized, they could become targets or points of leverage for regulators and malicious actors alike.