Struggles for decentralization have long shaped the development of smart contracts and layers of governance in the crypto ecosystem.
Last week, something else struck: Hetzner, the second-largest hosting provider for Ethereum, clarified that miners from crypto-currencies cannot use its server farms to support the blockchain network, or any other cryptocurrency business.
” Unauthorized
“Use of our products for any mining-related application, even remotely, is not permitted,” Hetzner said in a message to customers. It clarifies that Proof-of-Stake and Proof-of-Work activities are prohibited. On the same subject : Ethereum: This Is The Key To Solving ETH’s SRM Centralization Issues – Here’s Why. “Even if you only run one node, we consider it a violation of our [conditions de service] “.
This development shed light on the power of a centralized player in blockchain infrastructure. Hetzner, a 25-year-old company based in Gunzenhausen, Germany, is one of the largest data center operators in Europe. It manages hundreds of thousands of servers in Germany, Helsinki and Virginia, USA.
The company’s decision highlighted an additional risk to the Ethereum community.
https://www.thedefiant.io/ethereum-scaling-eip-4844
“There is significant IT counterparty risk in all [couches 1] where a majority of the computers that secure them are running on any public cloud, Hetzner or not,” Chris McCoy, the co-creator of STORE, which aims to deliver cloud services governed by tokenholders, told The Defiant. . “IT counterparty risk is a major major problem in Web3, except that only a few of us really understand it. »
On August 26, Hetzner’s Twitter account directed the public to her Reddit post in response to a tweet from Maggie Love, co-founder of W3bCloud, a company that builds data centers to support what she calls “the economy. web3 and blockchain”.
Love’s screenshot shows that 16.9% of Ethereum nodes are hosted on Hetzner’s servers, according to ethernodes.org. The number of Ethereum nodes hosted on Hetzner appears to have dropped by 15% nodes.
The fact that Ethereum nodes depend on a company that may be hostile to blockchain uses has long irritated members of the DeFi community. Anthony Pompliano, promoter and influencer of bitcoin, denounced in 2020 the dependence of Ethereum on Amazon Web Services.
Still, the issue has become a pressing priority as the teams behind many DeFi apps banish addresses that may face sanctions from the US Treasury Department’s Office of Foreign Assets Control. Earlier this month, the agency blacklisted Tornado Cash, the popular crypto “mixer” that anonymizes transactions, for allegedly laundering $7 billion worth of crypto.
Some members of the Ethereum community have downplayed the issue of centralization. Guillaume Ballet, an Ethereum core developer, said that while the situation is “scary,” it would be easy for Ethereum miners or stakers to switch to other machines if a cloud service provider stops. his activities.
Yet Ethereum isn’t alone in being affected by the centralization of what McCoy calls “public clouds.”
According to research published by STORE, nodes hosted on Hetzner account for 34% of validators on Solana.
Hetzner is also the leading provider of node hosting services for Bitcoin, with 6% of nodes, according to STORE. Between 20 and 25% of the nodes of the largest cryptocurrency in the world are based on public clouds.
New debate
Jacob Gadikian works at Notional DAO, which provides validation services and uses Hetzner. Gadikian is generally a Hetzner fan. See the article: Good or bad news: Ethereum’s future version is still on track for 2022. “You can’t get the kind of product and service you get from them anywhere else,” he said.
Gadikian said he is working to reach out to Hetzner’s senior management team to clarify the companies’ position on the use of their solutions by nodes in blockchain networks.
Despite this, the Hetzner episode is sure to spark new debates about the push for decentralization in crypto infrastructures. “Everything from blockchain history to infrastructure, consensus and governance needs complete trust minimization,” STORE’s McCoy said.
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