On the previous day, Hetzner representatives stated that the terms of use of the company's cloud services do not allow to work with its cloud for mining or other similar activities. Accordingly, hosting nodes using the company's services essentially violates the terms of engagement with its services. The news has the cryptocurrency community very wary, as the vast majority of node owners on the Ether network rely on such centralized services.

Ethereum’s problems – what are they

A node or node in the Ethereum network is a device with special software in the form of a blockchain client that stores complete blockchain data, participates in block validation, maintains the network, and provides data on demand. Nodes can be full nodes, which store the full history of all transactions in the blockchain, or light nodes, which allow transactions to take place without uploading an abundance of data.

That said, the acquisition and management of local servers to support a blockchain network by those wishing to run a node can be time-consuming and inconvenient. This is why blockchain participants often use cloud computing companies to host nodes. This saves them resources, but it also provides them with excellent results in terms of uptime, i.e., the activity time of software and hardware.

Distribution by node type on the Etherium network

Cloud services are therefore very popular with node owners. According to statistics from analytics platform Messari, more than 60 per cent of nodes on the Ethereum network are running in the cloud. Of these, just three providers – Amazon Web Services, Hetzner and OVH – control 69 per cent.

Statistics on the largest cloud node providers for Ethereum and Solana

Specifically, Hetzner accounts for about 16.9 per cent of the total number of cloud nodes on Etherium. More detailed statistics for the other providers are shown in the screenshot below.

More detailed statistics by provider for cloud nodes in Etherium

Messari’s stats also show that more than 95 percent of the nodes in the Solana altcoin network are also powered by centralised platforms. Such figures suggest a complete centralisation, but Solana co-founder Anatoly Yakovenko has already spoken out on the matter on Twitter with the exact opposite viewpoint. Here is his rejoinder.

Decentralisation is an absolute, not a relative concept. A pie chart makes no sense here. A network can have 99 per cent of its nodes on Amazon Web Services, but still be extremely decentralised if at least 1 per cent of the nodes are more than 10,000 independent computers.

Accordingly, even the current situation is not a problem, as the network will continue to operate at the expense of the remaining nodes in the event of a cloud provider failure.

Etherium and other cryptocurrencies

So, back to the Hetzner problem. According to Decrypt’s sources, the day before, in a section on Reddit, the company posted a response to a user’s question about whether he could run a blockchain node on the platform’s cloud. Here’s a small quote from the publication.

Using our service for any activity even remotely related to mining is not allowed. This applies to Etherium as well. This applies to both Proof-of-stake and Proof-of-Work or trading applications. This applies to all of our products except co-location. Even if you just run one node of the cryptocurrency network, we will take it as a violation of our terms of use. We know that there are a lot of Etherium users currently working with Hetzner, and we have been discussing internally how best to solve this problem.

The bottom line is that if Hetzner suddenly decides to shut down the nodes completely tomorrow, there is bound to be instability on the Etherium network – maybe even higher fees or longer transaction confirmation times. Fortunately, the cryptocurrency has enough other categories of node owners that will support ETH transfers. So while the situation looks worrisome, there’s really not much for altcoin holders to worry about. And it’s unlikely that the company will decide to harm its own reputation in such radical ways.


We think the massive use of centralized cloud providers does pose risks to decentralized blockchains. However, the world has experienced problems with AWS before, affecting the functionality and availability of some blockchain platforms. However, in the end, it was limited to short-lived inconveniences - these companies are not interested in their own services being unavailable either. In addition, as Anatoly Yakovenko confirmed, a small number of nodes that do not use cloud services are enough to keep blockchains running. And they do now.


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