Wait...have we been lied to about decentralization??
There's a strange irony that big players in Web3 are trying to get away from.
On one hand, Web3 evangelists will tout ‘decentralization’ as being one of the key differentiators of Web3 compared to Web2 and Web1.
(Hell, we do it all the time).
On the other hand, it turns out many applications still rely on centralized services.
And while we knew this happened, we didn't realize its extent.
For example, Ethereum uses ‘nodes’ (computers in its network) to verify transactions, which anyone can set up.
(That’s one of the features of a decentralized blockchain, anyone can help run it).
Problem is, many participants on the Ethereum network use centralized cloud service providers to host their nodes.
Data from Ethernodes.org shows that ~62% of all nodes on the Ethereum network operate via centralized hosting services, like Amazon Web Services (AWS).
62%!? Yikes!
And of those hosted nodes, ~16% currently use Hetzner's service.
...which could be a problem.
Hetzner recently highlighted that:
“Using our products for any application related to mining, even remotely related, is not permitted…
This includes Ethereum. It includes proof of stake and proof of work and related applications. It includes trading.”
Here’s why this could be a problem:
While it looks like Hetzner are turning a blind eye to folks hosting Ethereum nodes on their servers right now - that could change.
If, one day, Hetzner decided to remove them - those users would be forced to find new service providers.
(Which could give even more power to a single provider like AWS).
It wouldn’t necessarily have a meaningful impact on Ethereum’s security; but it would likely scare the industry enough to affect ETH prices.
Here's the good news:
Fully decentralized cloud service providers do exist!
So Hetzner kicking people off their servers would be bad for their own business, and good for Web3.
(We're guessing that first bit is why they're quietly continuing to allow Ethereum nodes on their servers).
