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A new report challenges just how decentralized blockchain platforms really are. According to blockchain management platform Chainstack, over 60 percent of all Ethereum nodes rely on cloud-based services, with 25 percent running on just one provider: Amazon Web Services (AWS).
This won’t come as a surprise to many working in the blockchain industry. The ease at which you can spin up a node on AWS, compared to buying all the equipment necessary to run such operations, makes it a no brainer. Especially for those running more powerful nodes recording millions of transactions per day on high-performance blockchains, like EOS or Tron.
But until now, there has been little data quantifying the extent to which the decentralized industry is running on highly-centralized cloud-based services. And, looking at Chainstack’s nifty bit of data analysis, the results are not looking good.
The report shows that 5,299 out of 8,933 Ethereum nodes run in the cloud, and power is concentrated in the hands of the few. Over 57 percent of Ethereum nodes are powered by the top ten cloud hosting providers.
Amazon Web Services tops the list, running 24.6 percent of Ethereum nodes. Next up is Alibaba Cloud, which runs 5.5 percent of all nodes, followed by Google Cloud, which runs 5.4 percent of all nodes.
That means that the CEOs of these companies - Jeff Bezos, Daniel Zhang or Sundar Pichai, and not the people - technically decide Ethereum’s fate. They have the power to shut off access to Ethereum nodes that rely on cloud services, meaning that, surprise surprise, Ethereum isn’t the bastion of decentralization we once thought it was.
While this is unlikely in practice, since it would not look good for their businesses, they may have little choice if governments put pressure on them to crack down on cryptocurrencies—coins that are supposed to be censorship resistant. It’s not like this kind of thing hasn’t happened before; In August, it was revealed that Amazon had banned Iranian developers from using AWS following sanctions by the US government. And it’s not like governments have a stellar view of crypto (remember these tweets?).
But how did Chainstack work all of this out?
It’s a bit complicated but essentially it used Ethereum mainnet data from ethernodes.org, removed duplicate IP addresses, mapped the IP addresses to Autonomous System Numbers (ASNs)—which are given to groups of IP addresses related to specific business—and checked that list against the ASNs of cloud hosting providers. In doing so, it collected a fairly reliable estimate of Ethereum nodes.
While the research focused on Ethereum, it’s likely others suffer the same fate. Tron has said it uses cloud services from Chinese internet giant Baidu. And blockchain projects like Komodo have specifically built tools to create blockchains directly on AWS.
In the past, people have referred to Ethereum as an AWS-killer, but this research suggests it’s more akin to AWS-enabler.