The world of alternative finance never sleeps. Ethereum is the perfect example of this constantly shifting market.
In September 2022, it carried out ‘the merge’ – the switching of the underlying technology that supports cryptocurrency transactions to a more carbon-efficient process – which was an immense and potentially risky migration.
By moving from the widely used ‘proof of work’ (PoW) consensus mechanism that ensures that the public ledger remains consistent to the newer ‘proof of stake’ (PoS) system, Ethereum has reportedly met its goal of reducing its carbon footprint by 99.99%. A hugely positive result. Less positive perhaps are other reports that the network has become more centralized, adding fuel to the centralization vs decentralization debate that continues to rage in the Web3 space.
Putting the centralization vs decentralization debate aside for a moment, the proof of stake is a positive move for the Web3 industry. It removes the friction of completing calculations and instead expects nodes to 'stake’ a lump sum of the relevant token as collateral.
Why is this exciting?
PoS chains solve several key problems that crypto enthusiasts see as obstacles to mainstream adoption. Namely the necessity to build pricey, carbon intensive, GPU rigs to participate in validation is eliminated. Miners no longer have to chase after a diminishing supply of chips (further exacerbating their scarcity), and instead can prioritize quality, service, and stability when looking at infrastructure.
It also helps smaller outfits, because, even if a lump-sum is needed to validate, through many crypto exchanges, retail investors can pool resources with like-minded investors and take joint ownership of nodes. Furthermore, once the artificial friction created in the PoW consensus has been removed from the chain the transactions are faster, smoother, and potentially cheaper as well. All of which helps crypto chains live up to the crypto dream of a digital economy that is truly fast, permissionless, and decentralized.
Infrastructure is a key component in achieving this crypto dream. Specifically scalable, stable and good quality infrastructure, including Web3 servers, supplied and managed by Web3 hosting providers.
Whether those providers are the big three cloud hyperscalers or bare metal hosting providers, all are an important part of realizing the decentralized ecosystem that is part of the founding principles of Web3 and blockchain.
Maggie Love, founder of Web3 infrastructure platform W3bCloud summed up the symbiotic relationship between Web3 companies and Web3 hosting providers in a tweet saying that “Ethereum cannot be decentralized if the stack is not decentralized…”. She further stated that “hardware infrastructure providers are important participants in blockchain ecosystems. Software doesn’t run without hardware. Designing for decentralization matters. Incentivising decentralization matters”.
Companies in this space require nodes – Web3 servers which hold the public ledger and which process and record transactions. These vary from chain to chain but typically Web3 companies don’t require very large Web3 servers. What they do require is:
Whether you are a blockchain and the group that has developed it, a node-as-a-service business or a crypto exchange serving retail traders, working with node server hosting providers that are committed to the Web3 space makes this process as fast and easy as possible.
If something goes wrong, you need to know that your node server hosting partner is easily contactable to fix it. And that doesn’t mean contact via a bot but with a real person who understands the market and its requirements.
While blockchain was originally touted as unhackable, it has been known to happen. An attacker gained control of Ethereum Classic (ETC) in 2019 and was able to rewrite the transaction history, getting away with $1.1 million. In 2021, “criminal use of cryptocurrency” was one of the top three most reported incidents in the FBI’s Internet Crime Report.
A great solution for any Web3 company concerned about security is to be part of a Global Private Network where traffic exchanged between dedicated and cloud servers, including cloud storage, is not rated. Ideally this should also include a personal private network that is isolated from the public network on a hardware level and private networks of other customers on a software level.
The world of Web3 and crypto is maturing. Ethereum’s announcement is representative of the change that is taking place in an industry that is famous for its rebellious nature and unregulated online economies. If Web3 is going to have a true impact on traditional banking systems, then it needs to make itself more relevant for today’s digital economies.
As the Ethereum foundation said as part of its announcement around the merge - “imagine Ethereum is a spaceship that isn’t quite ready for an interstellar voyage. With the beacon chain, the community has built a new engine and a hardened hull. After significant testing, it’s almost time to hot-swap the new engine for the old midflight. This will merge the new, more efficient engine into the existing ship, ready to put in some serious lightyears and take on the universe.”
If you are looking for Web3 servers from a node server hosting provider to help you take on the universe, please get in touch with us today.
We are here to bridge the gap between the behemoth hyperscale cloud providers and the do-it-yourself blockchain enthusiasts with optimized Web3 servers and crypto trading servers, market-leading support and smart, dedicated people.