# Consensus Layer

These graphs represent the historical decentralisation of *block production* for various blockchain systems. Each metric is calculated based on the distribution of blocks across the entities that produced them in each time period. Read more...

## Options

#### Nakamoto coefficient

The Nakamoto coefficient represents the minimum number of entities that collectively control more than 50% of the resources (in this case, the majority of mining / staking power).

#### Gini coefficient

The Gini coefficient represents the degree of inequality in a distribution. Values close to 0 indicate high equality (in our case, all entities in the system produce the same number of blocks) and values close to 1 indicate high inequality (one entity produces most or all blocks).

#### Shannon Entropy

Shannon entropy (also known as information entropy) represents the expected amount of information in a distribution. Typically, a higher value of entropy indicates higher decentralization (lower predictability).

#### HHI

The Herfindahl-Hirschman Index (HHI) is a measure of market concentration. It is defined as the sum of the squares of the market shares (as whole numbers, e.g. 40 for 40%) of the entities in the system. Values close to 0 indicate low concentration (many entities produce a similar number of blocks) and values close to 10,000 indicate high concentration (one entity produces most or all blocks).

#### Theil index

The Theil index captures the lack of diversity, or the redundancy, in a population. In practice, it is calculated as the maximum possible entropy minus the observed entropy. Values close to 0 indicate equality and values towards infinity indicate inequality.

#### Max power ratio

The max power ratio represents the share of blocks that are produced by the most “powerful” entity, i.e. the entity that produces the most blocks.

#### Tau Index

The τ-decentralization index represents the minimum number of entities that collectively control more than a fraction τ of the total resources (in this case more than 66% of mining / staking power).