The terms of service set by Hetzner, the second largest Ethereum host, prohibit clients from running nodes, mining and processing, charting, storing and trading blockchain data.
As the Ethereum ecosystem enters the final stages of preparing for the long-awaited upgrade, German cloud provider Hetzner The Merge has reaffirmed its stance against allowing both proof-of-stake (PoS) and proof-of-work mining operations. PoW) applications.
Hetzner, a private central cloud service provider, entered the discussion about the operation of blockchain nodes, highlighting the terms of service that prevent customers from using the services for cryptographic activities. However, the Ethereum community perceived the disclosure as a threat to the ecosystem, with Hetzner cloud services hosting around 16% of Ethereum nodes, as shown below.
Ethereum mainnet statistics. source: ethernodes.org
In crypto, reliance on centralized service providers has historically been perceived as a negative trait when it comes to long-term service, and with good reason. Redditor u/Supermann has questioned the anti-crypto policy put forward by the second largest Ethereum mainnet host, Hetzner. Hetzner clarified the doubts and legal implications of using his services for crypto activity, stating:
“Our products are not allowed to be used for any application, even remotely related to mining. This includes ethereum.”
The company also said the ban covers employee nodes, mining and farming, collusion, storage and trading of blockchain data. While acknowledging that their service has been widely used to power Ethereum, Hetzner explained that we are “internally discussing how best to address this issue.” As a fair warning to the community, Hetzner added:
“If you or other potential customers are unsure if your use case will violate our Terms of Service, please contact us.”
The latest statement from German cloud provider Hetzner demonstrates the impact of the decision taken by centralized organizations on growing crypto ecosystems.
Most of the Ethereum ecosystem currently runs on Amazon.com, which hosts 54% of all Ethereum nodes. Some of the major cloud providers currently hosting Ethereum nodes are Oracle Cloud (4.1%), Alibaba (2.8%) and Google Cloud (2.7%).
Related: Ethereum Foundation Clarifies Upcoming Merge Upgrade Will Not Lower Gas Fees
The controversy surrounding the unknowing upgrade of Ethereum has led to many misconceptions about what this means for the future of the blockchain. The Cointelegraph report highlights five major misconceptions regarding the expected Ethereum upgrade.
Falling gas fees and faster transactions are the biggest rumors circulating throughout the ecosystem that have been confirmed to be untrue. However, the next update, called the Shanghai Update, will bring faster and cheaper transactions.