Is Amazon a Threat to Over 30% of all Ethereum Nodes?

The decentralization of any cryptocurrency network is often a work in progress. A lot can be learned from looking at the distribution of network nodes. For Ethereum, it appears that Amazon remains the go-to hosting provider. That may or may not be a smart decision. 

The Current State of Ethereum Nodes

The health of a cryptocurrency network can often be gauged by looking at the number of network nodes. Every node collects blockchain data and tries to pass it on to other entities on the network. More nodes means more security, transparency, and better data accuracy. It is a very simple concept, but one with some intricacies that can never be ignored or overlooked.

Judging by the current Ethernodes statistics, there are some potential issues with a lot of Ethereum nodes. Just 25.09% of all nodes are residential, indicating users run the software on their own internet-connected device at home. It is not difficult to do so. Even a Raspberry Pi 4 can support the software without issues, yet it is not necessarily the most “convenient” option.

BlocDesk Ethereum Nodes Origin
Source: Ethernodes

That becomes all the more apparent when looking at the number of “hosted” Ethereum nodes. Over 70.4% of the 8,092 Ethereum nodes exist on external servers, primarily on Amazon. That is a staggering amount, although it will not come as too big of a surprise either. Hosting a node on an external server, in exchange for a minor fee, is a good way to support the network for most people.

It is also worth noting businesses host 2.84% of the nodes, with 66 of them running on cellular connections. Perhaps the more interesting aspect is how two nodes are listed as “government”, which may surprise a lot of enthusiasts. Everyone wants to get in on the Ethereum action, it seems. 

The Centralized Aspect and Amazon

Opting for external hosting for a network node makes a lot of sense on paper. It does not contribute to the overall decentralization of a network, though. Instead, it has the completely opposite effect. There are several hosting providers Ethereum enthusiasts can pick from. However, the vast majority reside with Amazon and its AWS product. 

BlocDesk Amazon ETH Nodes
Source: EtherNodes

This creates a very grave concern. If Amazon were to suddenly “ban” crypto activity on its AWS platform, 1,870 Ethereum nodes will disappear. They can be spun up elsewhere, as Alibaba, Hetzner Online, Google Cloud, and Digital ocean are all popular too. However, these options are not a solution to promote more decentralization by any means, 

It is worth noting this Amazon “issue” is not unique to Ethereum either. Any cryptocurrency network faces such centralization concerns over time. Even Bitcoin isn’t safe from flack, even though there are convenient ways to look into other options. Ultimately, it is all about convincing more people to run nodes at home first and foremost. 

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