A wake-up call for Ethereum’s future

Just as the Ethereum ecosystem reached its final stages of preparation for its much-anticipated upgrade, The Merge, the German cloud provider Hetzner, reiterated its stance against allowing mining for both proof-of-stake (PoS) and proof-of-work (PoW ) applications.

Hetzner, a private, centralized cloud provider, waded into a discussion around running blockchain nodes, highlighting terms of service that prohibit customers from using the services for crypto activities. However, the Ethereum community perceived the disclosure as a threat to the ecosystem as Hetzner’s cloud services host nearly 16% of Ethereum nodes, as shown below.

In crypto, reliance on centralized service providers has historically been perceived as a negative trait when it comes to long-term business – and for good reason. Redditor u/Supermann- questioned the anti-crypto policies set by the second largest Ethereum Mainnet host, Hetzner. To clarify doubts and legal implications related to using the services for crypto activities, Hetzner stated:

“It is not allowed to use our products for any application related to mining, even remotely related. This includes Ethereum.”

The company also stated that the non-remuneration includes operation of nodes, mining and farming, plotting, storage of blockchain data and trading. While acknowledging the extensive use of the services to power Ethereum, Hetzner revealed that “we have internally discussed how best to address this issue.” As a fair warning to society, Hetzner added:

“If you or other potential customers are unsure whether your use case will violate our terms, please contact us.”

The latest disclosure from German cloud provider Hetzner shows the impact of the decision made by centralized entities on thriving crypto ecosystems.

The majority of the Ethereum ecosystem currently runs on Amazon.com, which hosts 54% of the total Ethereum nodes. Some of the common cloud providers currently hosting Ethereum nodes include Oracle Cloud (4.1%), Alibaba (2.8%), and Google Cloud (2.7%).

Related: The Ethereum Foundation clarifies that the upcoming Merge upgrade will not reduce gas fees

Discussions surrounding the Ethereum upgrade have unwittingly fueled many misconceptions about what it means for the future of the blockchain. Cointelegraph’s report highlighted the top five misconceptions about the expected Ethereum upgrade.

Reduced gas fees and faster transactions are the biggest rumors spreading across the ecosystem, which have been confirmed to be false. However, a subsequent upgrade, called the Shanghai Upgrade, will provide faster and cheaper transactions.