Just as the Ethereum ecosystem is reaching the final stages of preparing for the much-anticipated upgrade, The Merge, Hetzner’s German cloud provider, is reaffirming its stance on not allowing mining operations for both proof-of-stake (PoS) and proof of work (PoW) application.
Hetzner, a private and centralized cloud provider, took part in discussions around running blockchain nodes, highlighting its terms of service that prohibit customers from using the service for crypto activities. However, the Ethereum community considers the revelation a threat to the ecosystem as Hetzner’s cloud service hosts nearly 16% of Ethereum nodes, as shown below.
In crypto, reliance on centralized service providers has historically been considered a negative trait in terms of long-term sustenance – and for good reason. Redditor u/Supermann- questioned the anti-crypto policy set by the second largest Ethereum Mainnet host, Hetzner. Clarifying doubts and legal implications related to the use of its services for crypto activities, Hetzner state:
“Using our product for any application related to mining, even remotely related, is not permitted. This includes Ethereum.”
The company also states that the non-allowance extends to running nodes, mining and farming, plotting, blockchain data storage and trading. While acknowledging the extensive use of its services to support Ethereum, Hetzner revealed that “we have been discussing internally how we can best address this issue.” As a fair warning to society, Hetzner added:
“If you, or another potential customer, are unsure whether your use case would violate our ToS, please contact us.”
Recent disclosures from German cloud provider Hetzner demonstrate the impact of decisions made by centralized entities on a growing crypto ecosystem.
The majority of the Ethereum ecosystem currently runs on Amazon.com, which hosts 54% of the total Ethereum nodes. Some of the major cloud providers currently hosting Ethereum nodes include Oracle Cloud (4.1%), Alibaba (2.8%) and Google Cloud (2.7%).
The discussion surrounding Ethereum’s improvement has unwittingly fueled a lot of misunderstandings about what it means for the future of blockchain. Cointelegraph report highlights Top five misconceptions about anticipated Ethereum upgrades.
Reduced gas costs and faster transactions are the biggest rumors that spread throughout the ecosystem, which have been confirmed to be untrue. However, the next upgrade, called the Shanghai upgrade, will provide faster and cheaper transactions.