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A wake-up call for the future of Ethereum

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Just as the Ethereum ecosystem reached the final stage of preparation for its much-anticipated upgrade, The Merge, a German cloud service provider Hetzner, reiterated its stance against allowing mining operations for proof-of-stake (PoS) i proof of work (PoW) applications.

Hetzner, a private, centralized cloud provider, stepped into the debate about running blockchain nodes and highlighted its terms of service that prohibit customers from using the services for crypto activities. However, the Ethereum community saw the revelation as a threat to the ecosystem, as Hetzner’s cloud services host nearly 16% of Ethereum nodes, as shown below.

Ethereum Mainnet Statistics. Source: ethernodes.org

In cryptocurrencies, dependence on centralized service providers has historically been seen as a negative trait when it comes to long-term sustenance – and for good reason. Redditor u/Supermann- questioned the anti-crypto policies set by the second largest Ethereum Mainnet host, Hetzner. Hetzner clarifies the doubts and legal implications associated with using its services for crypto-activities established:

“The use of our products for any application related to mining, even remotely related, is not permitted. This includes Ethereum.”

The company also said that the disallowance applies to node operations, mining and farming, rendering, blockchain data storage and trading. While Hetzner acknowledged the extensive use of his services to power Ethereum, he revealed that “we have been discussing internally how best to solve this problem.” As fair warning to the community, Hetzner added:

“If you or other potential customers are unsure whether your use case violates our terms of service, please contact us.”

The latest revelation from German cloud provider Hetzner shows the impact of centralized entities’ decisions on thriving crypto ecosystems.

Most of the Ethereum ecosystem currently runs on Amazon.com, which hosts 54% of Ethereum’s total nodes. Major cloud providers currently hosting Ethereum nodes include Oracle Cloud (4.1%), Alibaba (2.8%), and Google Cloud (2.7%).

Related: The Ethereum Foundation clarifies that the upcoming Merge upgrade will not reduce gas fees

Discussions surrounding Ethereum’s upgrade have unwittingly fueled numerous misconceptions about what it means for the future of blockchain. The Cointelegraph report highlighted Top Five Misconceptions About Ethereum’s Expected Upgrade.

Reduced gas fees and faster transactions are the biggest rumors circulating throughout the ecosystem that have been proven false. However, a subsequent upgrade called the Shanghai upgrade will bring faster and cheaper transactions.