Data center operator hosting 17% of Ethereum’s nodes says staking is not permitted

Hetzner On-line, an information middle primarily based in Germany, mentioned that utilizing its internet hosting companies for any software associated to cryptocurrency mining shouldn’t be permitted. The corporate disclosed its stance in a Reddit thread, saying that its ban on mining-related makes use of consists of each Proof-of-Stake (PoS) and Proof-of-Work (PoW) functions.

The corporate’s stance on PoS functions might have severe implications on the Ethereum ecosystem, as 16.0% of Ethereum’s validator nodes are at the moment hosted on Hetzner’s servers.

Hetzner’s feedback have been met with disapproval from the broader crypto group, with many criticizing the corporate for internet hosting cryptocurrency-related functions, together with mining, for years with out disclosing it of their phrases of service.

Hetzner reveals the value of centralizing Ethereum nodes

As Ethereum will get nearer to the Merge, the controversy surrounding its transition to a Proof-of-Stake (PoS) community appears to be rising. Many have voiced their considerations over the present centralization of Ethereum’s validator nodes, saying {that a} transition to a PoS system would additional exacerbate this drawback.

The sanctioning of privacy-preserving companies like Twister Money has additionally elevated considerations over the potential of censorship turning into ripe on the Ethereum community.

The bigger dialog about Ethereum’s centralization arose final yr after a Messari report revealed {that a} regarding proportion of Ethereum’s Mainnet nodes are hosted on a handful of centralized servers like AWS. With the Merge getting nearer, the dialog in regards to the centralization of Ethereum’s nodes has gotten hotter, with knowledge displaying that over 70% of them are hosted on three cloud suppliers — Amazon Net Companies (AWS), Hetzner On-line, and Oracle Cloud. Over 53% of Ethereum’s Mainnet nodes are hosted on AWS, whereas 16% are hosted on Hetzner.

And whereas many nervous about Ethereum’s over-reliance on AWS, plainly a much bigger concern might come up with Hetzner. In a Reddit assist thread, the corporate said that utilizing its merchandise for any cryptocurrency-related companies isn’t permitted beneath its TOS.

“Utilizing our merchandise for any software associated to mining, even remotely associated, shouldn’t be permitted. This consists of Ethereum. It consists of proof of stake and proof of labor and associated functions. It consists of buying and selling. It’s true for all of our merchandise, besides colocation. Even for those who simply run one node, we think about it a violation of our TOS.”

The corporate mentioned that it’s conscious that many Ethereum customers depend on Hetzner and that it has been internally discussing how one can tackle the problem.

I do know that is off matter, but when there are Hetzner clients who’re utilizing Ethereum, they need to please learn this: https://t.co/Lhlv3KAtUZ –Katie

— Hetzner (@Hetzner_Online) August 26, 2022

In a separate help ticket to a consumer, Hetzner mentioned that working functions which are used to mine cryptocurrencies aren’t allowed on their devoted and cloud servers. The corporate famous that its coverage doesn’t enable working any software with cryptocurrencies, together with mining, working nodes, buying and selling, and storing blockchain knowledge.

Hetzner’s feedback seemingly got here as a shock to its customers, a lot of whom declare they’ve been working some or the entire above-mentioned functions on its servers for years with out points. The truth that the corporate is discussing how one can transfer ahead and “tackle the problem” led many to consider they should go away Hetzner and transfer to a different internet hosting service.