Questions are being raised about whether the computing infrastructure built on top of Ethereum is too centralized. About 32% of all Ethereum nodes, as on-chain data, operate on Amazon AWS servers. But Amazon claims it to be 25%.
This issue was brought forth by Anthony Pompliano, Morgan Creek co-founder, in 2020 when he tweeted that Jeff Bezos could shut down most Ethereum-based DeFi apps by shutting down AWS. But then Pompliano’s tweet is not accurate. Data shows that Amazon, Verizon, AT&T, Spectrum and Comcast accommodate 47% of all nodes on the Ethereum network. It tallies with the total distribution of Ethereum across the US, which runs almost five times the number of nodes compared to other countries.
Germany is next with 11%. Experts believe that if a malicious actor gains access to the nodes through nefarious means in an attack spanning the five US companies, they would be capable of causing damage to the network. Dankrad Fried, a researcher at the Ethereum Foundation, says 51% of attack does not give an attacker absolute control. But it can cause serious problems – stop the user from using the chain and revert the chain; it can undo a certain number of blocks and charge the order of the transactions in them. Experts say a 51% attack cannot take coins from a wallet or mint new coins. However, reverting transactions can lead to double spending – and this is a great concern.
Amazon launched Ethereum on its Amazon Managed Blockchain service in 2021 to allow users to activate an Ethereum node within minutes. It achieved a semi-frictionless experience for developers. After garnering the trust and respect of the world’s biggest companies in Web2, Amazon AWS now wants to establish a similar real estate in Web3.