One of the most important issues of risk management is that eggs should not be put in the same basket. This is true for the basic service logic as well as for the investment aspect. Considering that nodes are at the core of blockchain companies, their concentration in a data center is also a risk factor. Two altcoins are at risk due to the concentration of nodes in data centers, according to crypto analytics firm Messari.
Solana and Ethereum node concentration are alarming!
Messari published a study showing that 65% of Ethereum nodes are in centralized data centers. In this context, Messari notes that two-thirds of web services come from the three big data providers. Thus, Hetzner, OVH, and Amazon Web Services account for 69% of all nodes located in their data centers. What’s more, Amazon’s combined share here is quite high at 53.7%.
Crypto needs to decentralize.
Three major cloud providers are responsible for 69% of the 65% of @Ethereum nodes hosted in data centers.
Of the estimated 95% of @Solana nodes hosted in data centers, 72% are hosted with the same cloud providers as @Ethereum. pic.twitter.com/oK08c3G6Of
— Messari (@MessariCrypto) August 18, 2022
According to the source, roughly 95% of all Solana nodes are kept in data centers. Also, interestingly, 72% of them are hosted by these three web service providers. However, Solana nodes seem to put more emphasis on Hetzner, which holds 42% of all centralized Blockchain nodes. Amazon Web Services, on the other hand, owns less than 3% of Solana’s nodes.
The report raises the question of whether Amazon can somehow manipulate Ethereum, given the concentration of 1,487 of the 4,653 active nodes they ‘hold’. It would be more interesting to see if Jeff Bezos could disable most DeFi implementations on Ethereum if he wanted to.
Leading altcoin Ethereum has ‘right to protect’
As you follow on Kriptokoin.com, Vitalik Buterin, the founder of Ethereum, made a verbal attack on XRP today. So it’s worth noting that this is an extremely good time to publish such a dump. Buterin said the cryptocurrency lost its ‘right to protect’ without revealing who should protect it.
However, according to experts, if Ethereum itself has such a ‘right of protection’, then the crypto world probably need not worry about the excessive node density looming in the hands of a web service provider.
Meanwhile, at press time, the leading altcoin Ethereum was trading at $1,872, gaining 1.31% on a daily basis. However, ETH is about 62% off its all-time high of $4.9k. Ethereum rival Solana (SOL), on the other hand, is down 0.25% at $40.88. SOL’s distance from the $260 peak is 84%.
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