Despite Bitcoin’s BTC/USD popularity as the world’s most popular cryptocurrency and one having the highest market capitalization, Ethereum ETH/USD is far more critical to the ongoing development of the Web3 ecosystem.
Ever since smart contracts started gaining traction for converting traditional contracts into their digital equivalents, the Ethereum Network has been the preferred choice for developers and entrepreneurs creating decentralized applications (dApps) and more specifically decentralized finance (DeFi) applications.
However, with crypto analytics platform Messari revealing that more than two-thirds of the Ethereum blockchain’s active nodes are being hosted on centralized servers, with more than 50% of those being contributed by Amazon, there can be stark implications for the start-up ecosystem that relies on arguably the world’s largest blockchain network in case of a hostile takeover.
According to the latest data, 66.1% of all active nodes are hosted on third-party servers. More than 54% of them rely on Amazon Web Services, part of Amazon.com Inc. AMZN.
Other cloud computing service providers include:
- Hetzner Online GmbH (10.58%)
- Google Cloud (6.91%)
- OVH SAS (3.39%)
- Oracle Cloud (3.35%)
Together, with AWS, they host more than 50% of all Ethereum nodes responsible for handling the network’s large transactional load.
While there are 15 other such centralized cloud service providers that cater to an additional 15% of Ethereum’s nodes, they remain far less important to the functioning of the Ethereum network, with admittedly negligible risk in the event of them shutting down.
For a truly decentralized blockchain network like Ethereum that has only recently made a landmark shift in its consensus mechanism, the reliance on cloud servers does put the network at the mercy of these providers and merits the question: Can Ethereum claim complete decentralization when more than half of its nodes are hosted using cloud computing services?
![Anticipation for Ethereum [ETH] 2.0 rises as metric reaches all-time high](https://crypto.newswireservice.net/wp-content/uploads/2023/01/ethereum-wale-1000x600-350x250.jpg)
