10% of Ethereum nodes use a web hosting service they are banned from

Key points to remember

• Hetzner, a web hosting service that hosts around 10% of Ethereum nodes, warned crypto users against its services.
• A representative of the company told Crypto Briefing that it takes an anti-crypto stance because some cryptocurrencies cause problems.
• Hetzner’s warning caused a backlash within the Ethereum community.

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Around 10% of Ethereum nodes today use Hetzner’s service.

Don’t use us for crypto, warns Hetzner

Ethereum’s reliance on centralized web hosting services has again come under scrutiny in the crypto community.

This time the talks are about Hetzner, a web hosting service that is currently dealing around 16% of remote Ethereum nodes (because 61% of nodes are remotely hosted, which equates to around 9.76% of all Ethereum nodes). A August 23 Reddit Post of Hetzner that resurfaced on Twitter today warned Ethereum users against using its service for crypto-related activities.

I know this is off topic, but if there are any Hetzner customers using Ethereum, they should read this: https://t.co/Lhlv3KAtUZ -Katie

— Hetzner (@Hetzner_Online) August 26, 2022

“If there are any Hetzner customers using Ethereum, they should please read this,” Hetzner tweeted today with a link to the post. In the post, Hetzner all but confirmed that he has a general crypto ban. An excerpt read:

“The use of our products for any mining-related application, even remotely, is not permitted. This includes Ethereum. It includes Proof of Stake and Proof of Work and related applications. This includes trading… Even if you only run one node, we consider it a violation of our ToS.

The post added that the company was “aware that there are currently many Ethereum users at Hetzner.” This prompted several responses from Hetzner users, some of whom questioned the ban and pointed to the company’s mention of a mining ban.

“Given that 16% of Ethereum PoW nodes are running on your platform, but are being migrated to PoS, can you explain to your customers WHY you don’t allow this in your terms and conditions?” a post under drhexc wrote.

“I don’t think the person running your account here, maybe Katie, here on Reddit, really understands what mining is and I wanted to try to explain, first of all, that I don’t do no mining using hetzer. In fact, hetzner would not provide any significant competitive advantage for mining,” added another passing by faddat.

The decentralization of Ethereum

As Hetzner is a web hosting service, it does not support crypto miners, which use raw computing power to mine cryptocurrencies like ETH and BTC. However, it is popular among node operators.

Several Twitter users within the Ethereum community also criticized Hetzner for his policy. “I have to give kudos where it’s due,” wrote Lefteris Karapetsas, founder of Rotki. “@Hetzner_Online does more to push us towards decentralization than the majority of projects in this space.

Crypto Briefing reached out to Hetzner to ask for an explanation of its anti-crypto policy, and a trade rep said it was banning Ethereum and other crypto activity because certain tokens were causing trouble. “If you haven’t received notice from the company, stay with us,” he said.

Ethereum’s reliance on services like Hetzner and Amazon Web Service has been the subject of intense debate in the past, with some claiming that the decentralization of the network suffers. Today’s development comes after weeks of discussions about the network’s ability to remain censorship-resistant following the Treasury’s ban on Tornado Cash. Critics say Ethereum will be inclined to attack once it completes the “merger” with Proof-of-Stake, which is expected to take place next month. Ethereum creator Vitalik Buterin weighed in on the matter, saying that he would view compliance with a regulatory ban as an attack on the network.

Disclosure: At the time of writing this article, the author of this article owned ETH and several other cryptocurrencies.

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