Is This Web Host Threatening Ethereum’s Future?

The German cloud service Hetzner GmbH has spoken out in its terms and conditions against any activities related to cryptocurrencies. The alarm bells are ringing, because shortly before the Ethereum merge, it turns out that the web hosting service provider hosts around 16 percent of all nodes in the Ethereum network. A still unresolved dilemma for the blockchain. Because the company has now emphasized again that no crypto activities will be tolerated via its service.

The company’s statement in connection with a current Reddit post caused a stir. In this, a user of the platform planned to set up nodes using the company’s service and submitted a request to the company for this purpose. This informed him without further ado that the use of the product for any crypto application, even in the remotest context, was not permitted. According to the terms and conditions, this includes both proof-of-stake and proof-of-work activities for the production of cryptocurrency. Furthermore, the company is aware that many Ethereum users are currently using their service to operate nodes. Supposedly one consults internally about the further procedure.

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Inquiries from BTC-ECHO about the reasons for this anti-crypto company policy have so far come to nothing.

Blockchain – not decentralized after all?

The case raises questions about a previously unsolved blockchain problem. While the technology is decentralized and open-ended in nature, some parts of its infrastructure still rely heavily on centralized web services. Amazon hosts a whopping 54 percent of all Ethereum nodes via its AWS cloud hosting service.

As a result, they are exposed to the company policies of numerous providers. The technical fallibility of the cloud hosts cannot be ruled out either and thus poses a risk. In December last year, some parts of the AWS service failed and disrupted the daily operations of many customers and users worldwide. A large-scale failure of these services would also paralyze the infrastructure of many crypto projects, including Ethereum, at least temporarily.

Just last June, blockchain security firm Trail of Bits released a comprehensive study examining these issues. BTC-ECHO reported:

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Shortly before the Ethereum merge

Ethereum is about to have its biggest upgrade, Ethereum 2.0. Here, the blockchain changes from its previous Proof-of-Work to Proof-of-Stake consensus mechanism. An update that should make Ethereum scalable and, above all, much more efficient.

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However, the General Terms and Conditions of Hetzner GmbH show that there is no differentiation in these matters. Users who violate the company’s terms and conditions are threatened with exclusion from the service. The future of an elementary part of the Ethereum infrastructure is in the stars.

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