Ethereum nodes running on centralized entities could pose threat to the blockchain in future

in LeoFinance2 years ago

The second largest token by market capitalization ethereum has lately seen a price drop, with over a 3% decrease following a new anti-crypto policy by cloud service providers Hetzner stating it's discontinuing its service from any crypto-related network, the Germer-based cloud providing centralized private company which provides about 16% of ethereum node service in a statement on 27th August, announced its shifting its focus from any crypto-related blockchain activity following its new term of service.

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Using our product for any application related to mining, even remotely related, is not permitted this includes Ethereum.
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This isn't a red signal to the ethereum ecosystem alone, it shows crypto dependence on centralized companies could be a long-term problem, the chart below shows over 50% of ethereum nodes are run by Amazon.com a centralized company which could review its crypto policy any time if need be without prior notice to its service providers as seen with hetzner.

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Nodes on the blockchain are computer devices trying to connect to the blockchain network, nodes complete validations of transactions on networks by sending back and forth verified information they help store data about a blockchain by securing transaction information nodes need to agree with all other nodes on the network before transactions are processed.

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The interconnectivity of nodes makes them very important in blockchain as multiple devices work simultaneously to verify and secure a blockchain reaching a definite term of consensus.

Such unnoticed policy by the centralized company could mean new rule can be implemented to boycott any crypto network running its node on the centralized platform, if hetzner the second largest ethereum node hosting company could revise its crypto policy without prior notice to subsequent crypto networks it shows even large hosting companies like amazon can choose to discontinue providing services to any crypto network which can expose any mention blockchain network to security bridge.

If there is need for crypto to stay decentralized it dependability on centralized companies need to be minimized by providing considerable percent of running nodes free from centralization.