Hetzner’s anti-crypto policies: a wake-up call for Ethereum’s future

Just as the Ethereum ecosystem was reaching its final stages in preparation for the highly anticipated upgrade, The Merge, German cloud provider Hetzner reiterated its stance against allowing mining operations both for proof of Stake (PoS) and Proof of Work (PoW).

Hetzner, a private and centralized cloud provider, weighed in on a discussion about running blockchain nodes, pointing out its terms of services 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.

In crypto, reliance on centralized service providers has always been seen as a negative trait for long-term sustenance – and for good reason. Redditor u/Supermann- has questioned the anti-crypto policies established by the second largest Ethereum Mainnet host, Hetzner. Clarifying the doubts and legal implications associated with using its services for crypto activities, Hetzner declared:

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

The company also said the non-permission extends to runtime nodes, mining and farming, tracing, blockchain data storage, and commerce. While acknowledging the heavy use of his services to power Ethereum, Hetzner revealed that “we have been discussing internally how best to resolve this issue.” As a fair warning to the community, Hetzner added:

“If you, or any other potential customer, are unsure whether your use case will violate our Terms of Service, please contact us.”

The latest revelation from German cloud provider Hetzner shows the impact of decision making by centralized entities on thriving crypto ecosystems.

The majority of the Ethereum ecosystem currently operates on Amazon.com, which hosts 54% of total Ethereum nodes. Some of the major cloud providers currently hosting Ethereum nodes include Oracle Cloud (4.1%), Alibaba (2.8%) and Google Cloud (2.7%).

Related: Ethereum Foundation Clarifies Upcoming Merge Upgrade Will Not Reduce Gas Fees

Discussions around the Ethereum upgrade have unknowingly sparked many misconceptions about what it means for the future of blockchain. Cointelegraph’s report highlighted the top five misconceptions about the planned Ethereum upgrade.

Reduced gas fees and faster transactions are the biggest rumors spreading through the ecosystem, and proven to be false. However, a later upgrade, called the Shanghai Upgrade, will allow faster and cheaper transactions.