Ethereum Nodes Largely Run on Cloud Services—This Host Says They’re Banned

Popular cloud service provider Hetzner hosts over 10% of Ethereum nodes—but the company says this violates its terms of service.

3 min read

Aug 26, 2022

Popular cloud service provider Hetzner has said that its product is not for crypto users—despite the fact it hosts roughly 10% of all Ethereum nodes.

In a Reddit post earlier this week, the company said that running just one node is a “violation.” A node is a computer that, together with other nodes, powers a decentralized network, like Bitcoin or Ethereum.

Nodes are needed to run software that can verify blocks and transaction data and keep a network chugging along.

Ethereum is the second largest cryptocurrency by market cap and, as it runs on a decentralized blockchain, anyone can set up a node in order to contribute and take part in running the network.

Many such participants on the Ethereum network make use of cloud computing providers to host their nodes. According to data from Ethernodes.org, almost 62% of all nodes on the Ethereum network operate via a hosting service, such as Amazon. Of those hosted nodes, 14% currently use Hetzner, which means the German company currently hosts 10% of Ethereum nodes.

The issue resurfaced this morning when W3bcloud co-founder Maggie Love lamented this fact in a tweet. Love suggested that Ethereum lacked proper decentralization because it relies so heavily on cloud services like Amazon, which itself accounts for 50% of all hosted Ethereum nodes. The tweet also name-checked Hetzner, and the company replied with a link to a Reddit post which it said customers who are using Ethereum “should please read.”

In the post, the company said its service should definitely not be used for things related to crypto, including Ethereum. “Using our products for any application related to mining, even remotely related, is not permitted,” it said.

“This includes Ethereum. It includes proof of stake and proof of work and related applications. It includes trading. It is true for all of our products, except colocation.”

Hetzner added: “We are aware that there are many Ethereum users currently at Hetzner, and we have been internally discussing how we can best address this issue.”

Hetzner did not immediately respond to Decrypt’s request for a comment.

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