Hetzner, one of the largest centralized cloud providers, made a potentially costly decision yesterday.
They made it publicly known that Ethereum nodes (or any other nodes, or anything blockchain-related) are not welcome on their service. This was announced in a tweet reply, linking to a Reddit post, which waved vaguely towards their Terms of Service.
Here is the exchange:
Here is the Reddit post linked in the tweet:
The post says hosting an Ethereum node on Hetzner violates their Terms of Service (ToS). They also include “trading.” It also lumps together Proof of Work and Proof of Stake, which are entirely different consensus mechanisms with vastly different resource consumption.
From a PR perspective, this is an unforced error on Hetzner’s part. They host 16% of Ethereum nodes. Pushing these nodes away will send them searching for distributed hosting alternatives (like Akash Network). As distributed networks grow, they become viable alternatives to centralized cloud service providers like Hetzner. The more viable the distributed networks become, the more they undercut the market power of the centralized services. Hetzner is accelerating the transition to distributed networks—at their own expense.
This announcement is more flash than substance. It establishes that hosting Ethereum nodes on Hetzner violates their ToS. Then it states that Hetzner knows they are currently hosting Ethereum nodes and are “internally discussing how we can best address this issue.”
Ultimately, they have taken a public stance that alienates one of the fastest-growing market segments to grandstand for a small group of people who already agree with them.
An ‘elevator pitch’ for decentralization
Centralization concentrates power so that it can be wielded. Decentralization distributes power as a check against despotism.
Proponents of distributed networks are willing to sacrifice personal power to ensure a healthier, more stable society.
People who preserve centralized power structures envision themselves at the center. They are willing to accept a less stable society for a chance at greater personal power for themselves or their group.
We are entering a technological era that will reduce the inefficiency of decentralization enough to begin transitioning to distributed power structures.
Blockchain enables this transition. Computer hardware is becoming distributed enough to create distributed networks for computing power and resources (this is what Akash does). The combination of distributed hardware and distributed networks creates the means to decentralize our digital world—which is increasingly becoming as ‘real’ as the physical world.