The Ethereum network is obviously distributed across the globe, and anyone holding 32 ETH is capable of running a node and contributing to the network. Even if you don’t have 32 ETH, you can stake on managed nodes, using exchange hosted nodes (Coinbase for example) or projects like Rocketpool. However, there has been concern about Ethereum’s concentration.
Ethereum nodes are really top heavy when it comes to distribution by country. The US is nearly half the network. Given that, I can kind of understand why the DOJ felt like they could sanction crypto mixers like Tornado Cash. Here’s the breakdown by country:
Ethereum Node Percentage by Country:
- United States (46.7%)
- Germany (11.9%)
- Singapore (4.5%)
- United Kingdom (3.7%)
- Japan (2.9%)
If you’re going to run your own node, you’re going to want some threshold of tech skills and operational management. The easiest way for most people to do this is through a cloud provider, like Amazon Web Services (AWS). Essentially you pay AWS to run the machine and keep it online, then you can log on and do whatever you want within that machine. Using a service like AWS means you don’t have to worry about your computer going down, so your node will always be active. Prior to services like this, you would have to manually restart your service if something happened, meaning you’d lose yield.
Given how easy and reliable running a node on these cloud providers has become, it’s the go-to option. That means most of the Ethereum nodes are not just concentrated by country–they’re concentrated by data center. Here’s where the hosting of these nodes come from:
Ethereum Node Percentage by Network Type:
- Hosting–Mostly Cloud Provider (64%)
- Of this, 62% is AWS
- Residential–People’s Homes (33.1%)
- Business (2%)
The crazy thing about this distribution is how concentrated nodes are within countries due to major cloud hosting services using their own large data centers. In the United States, 45% of all nodes are in Ashburn, Virginia. A town of 46,349 people hosts nearly half of all the Ethereum nodes in the country because that is where Amazon’s primary East coast datacenter lives.
Ultimately, I think the risk around Ethereum centralization is overstated. We have to balance the level of centralization with the rate of progress we want to make, and I’m not concerned about the scale Ethereum is at. But decentralization junkies do have a point, a single disaster could take out 45% of the Ethereum nodes in an instant.