A lively debate on Reddit Friday resurfaced the discussion of whether the computing infrastructure built on top of Ethereum is too centralized. According to on-chain data, approximately 32% of all Ethereum nodes operate on Amazon AWS servers. However, Amazon claims the number to be closer to 25%.
Morgan Creek co-founder Anthony Pompliano increased awareness of the issue in 2020 when he tweeted, “Jeff Bezos could shut down most… Ethereum-based DeFi apps by simply shutting off AWS.”
Jeff Bezos could shut down most of these Ethereum-based “DeFi” apps by simply shutting off AWS.
You’re not decentralized if you just spin up servers with Uncle Jeff!
— Pomp 🌪 (@APompliano) October 7, 2020
Since 2020 little has changed regarding the improvement of node decentralization within Ethereum. However, Pomp’s tweet is not entirely accurate.
Centralization of Ethereum
The below image shows the percentage of hosted Ethereum nodes running on AWS. At first glance, this looks highly concerning as it goes against the decentralization narrative in Ethereum.
Yet, the chart ignores nodes running on private machines instead of cloud-hosted servers. Hosting service providers facilitate around 67% of all nodes, and 29% are located in residential settings.
Interestingly, a stat that is not commonly analyzed is that over 50% of the residential nodes run through a handful of US-based internet providers. Therefore, Verizon, Comcast, Spectrum, and AT&T make up 51% of the unhosted Ethereum nodes.
Therefore, Amazon, Verizon, AT&T, Spectrum, and Comcast facilitate around 47% of all nodes on the Ethereum network. This percentage tallies with the total distribution of Ethereum across the United States. The US runs almost 5 times the number of nodes compared to other countries; the next highest in Germany with 11%.
At 47%, this is precariously close to the often cited magic number of 51% required to take down a network. Should a malicious actor gain access to…
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