Is this web host a threat to Ethereum's future?
Germany's cloud service Hetzner GmbH has taken a stance in its terms of service against all activities related to cryptocurrencies.
The German cloud service Hetzner GmbH has spoken out in its terms of service against all activities related to cryptocurrencies. The alarm bells are ringing, because just before the Ethereum merge, the web hosting provider was found to host about 16% of all Ethereum network nodes. An unresolved dilemma for the blockchain. Because the company has again stressed that no crypto activities will be tolerated via its service.
The company's statement in connection with a recent Reddit post caused a sensation. There, a platform user planned to set up nodes using the company's service and filed a request with the company. It told him outright that using the product for any crypto application, even in the most remote context, was not allowed. According to the terms, this includes both proof-of-stake and proof-of-work activities for producing cryptocurrency. Furthermore, the company is aware that many Ethereum users are currently using its service to run nodes. They are likely debating the next steps internally.
Blockchain: Not Decentralized After All?
The case raises questions about a blockchain issue that has gone unresolved until now. Although the tech is decentralized and open by nature, parts of the infrastructure still rely heavily on centralized web services. Amazon hosts as much as 54 percent of all Ethereum nodes via its AWS cloud hosting service.
As a result, they’re exposed to the policies of many providers. Also, the technical glitches of cloud hosts can't be ruled out and pose a risk. In December last year, several parts of AWS service went down, disrupting daily operations for many customers worldwide. A large-scale outage of these services could also temporarily cripple the infrastructure of many crypto projects, including Ethereum.
Right before the Ethereum Merge
Ethereum is about to get its biggest upgrade, Ethereum 2.0. Here the blockchain shifts from its previous Proof-of-Work to a Proof-of-Stake consensus mechanism. An update meant to make Ethereum more scalable and, above all, more efficient.
However, the Terms of Service from Hetzner GmbH show there's no distinction in these matters. Users who violate the company’s terms are threatened with service exclusion. The future of a critical piece of Ethereum's infrastructure is up in the air.
