March 25, 2023

As the Ethereum ecosystem is in the final stages of preparing for the much-anticipated upgrade, German cloud provider Hetzner’s Merge reiterated its stance against allowing proof-of-stake (PoS) and proof-of-work (PoS) mining operations. PoW) application.

Hetzner, a private, centralized cloud provider, has participated in discussions about running blockchain nodes, highlighting its terms of service that prohibit customers from using the service for cryptographic activities. However, the ethereum community sees the discovery as a threat to the ecosystem, as Hetzner’s cloud service hosts nearly 16% of ethereum nodes, as shown below.

Ethereum mainnet statistics. Source:

In the cryptocurrency space, reliance on centralized service providers has historically been seen as a negative feature when it comes to long-term sustenance — and for good reason. Redditor u/Supermann – Questions the anti-crypto policy of Hetzner, the second largest Ethereum mainnet host. Clarifying concerns and legal implications related to using its services for crypto activities, Hetzner statement:

“It is not permitted to use our products for any mining-related applications, even remotely related ones. This includes Ethereum.”

The company also said the non-stipend extends to running nodes, mining and farming, graphing, storage and trading of blockchain data. Hetzner acknowledged that its services are widely used to power Ethereum, but revealed that “we have been discussing internally how best to address this.” As a fair warning to the community, Hetzner added:

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

The latest disclosure from German cloud provider Hetzner shows the impact of decisions made by centralized entities on the burgeoning crypto ecosystem.

Currently, most of the Ethereum ecosystem runs on, which hosts 54% of 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 that upcoming Merge upgrade will not reduce gas fees

The discussion surrounding the Ethereum upgrade has unwittingly led to many misunderstandings about what it means for the future of the blockchain. Cointelegraph’s report highlights the top five misconceptions about the expected Ethereum upgrade.

Lower gas fees and faster transactions are the biggest rumors circulating throughout the ecosystem that have been proven untrue. However, a subsequent upgrade called the Shanghai upgrade will offer faster and cheaper deals.