Hetzner Online, a knowledge center based mostly in Germany, stated that utilizing its hosting providers for any utility associated to cryptocurrency mining is not permitted. The firm disclosed its stance in a Reddit thread, saying that its ban on mining-related makes use of contains each Proof-of-Stake (PoS) and Proof-of-Work (PoW) functions.

The firm’s stance on PoS functions may 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 hosting cryptocurrency-related functions, together with mining, for years with out disclosing it of their phrases of service.

Hetzner reveals the worth 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 downside.

The sanctioning of privacy-preserving providers like Tornado Cash has additionally elevated considerations over the likelihood of censorship changing into ripe on the Ethereum community.

The bigger dialog about Ethereum’s centralization arose final 12 months 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 concerning the centralization of Ethereum’s nodes has gotten hotter, with knowledge exhibiting that over 70% of them are hosted on three cloud suppliers — Amazon Web Services (AWS), Hetzner Online, and Oracle Cloud. Over 53% of Ethereum’s Mainnet nodes are hosted on AWS, whereas 16% are hosted on Hetzner.

ethereum mainnet nodes hosting
Chart exhibiting the distribution of Ethereum Mainnet nodes by cloud suppliers (Source: Ethernodes.org)

And whereas many anxious about Ethereum’s over-reliance on AWS, evidently a much bigger challenge may come up with Hetzner. In a Reddit assist thread, the corporate said that utilizing its merchandise for any cryptocurrency-related providers isn’t permitted underneath its TOS.

“Using our products for any application related to mining, even remotely related, is not permitted. This includes Ethereum. It includes proof of stake and proof of work and related applications. It includes trading. It is true for all of our products, except colocation. Even if you just run one node, we consider it a violation of our TOS.”

The firm stated that it’s conscious that many Ethereum customers depend on Hetzner and that it has been internally discussing the way to tackle the problem.

In a separate help ticket to a person, Hetzner stated that working functions which can be used to mine cryptocurrencies aren’t allowed on their devoted and cloud servers. The firm famous that its coverage doesn’t permit operating any utility 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, many of whom declare they’ve been operating some or all of the above-mentioned functions on its servers for years with out points. The incontrovertible fact that the corporate is discussing the way to transfer ahead and “address the issue” led many to imagine they must depart Hetzner and transfer to a different hosting service.

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