Author: rekt news
Translated by: Tim, PANews
Coinbase experienced interruptions, Robinhood faced lags, and Infura outages prevented MetaMask from connecting. Within minutes, Layer 2 networks such as Polygon, Optimism, Arbitrum, Base, Linea, and Scroll went down one after another.
ManFromHell bluntly stated: "When AWS crashes, half of the crypto world comes to a standstill. The so-called decentralized atmosphere today is truly absurd."
Ethereum continued to produce blocks, and Bitcoin operated smoothly.
The blockchain itself remained unscathed; however, exchanges interrupted services, wallet connections dropped, and users were locked out of "decentralized" finance due to a minor DNS resolution issue from a single cloud service provider.
An industry aimed at eliminating trusted third parties has proven that its operation still relies on the infrastructure run by Jeff Bezos.
When Amazon's servers sneeze, the so-called anti-censorship revolution comes to a halt. Who is the actual controller?
Infura, an infrastructure service supported by Consensys, reported interruptions in the Polygon, Optimism, Arbitrum, Linea, Base, and Scroll networks during the AWS crash. This service primarily connects MetaMask to blockchain networks.
At 3:11 AM Eastern Time, when the DynamoDB endpoint in the Amazon US-EAST-1 region experienced a DNS resolution failure, Infura's status page turned red in an instant.
Ethereum mainnet JSON-RPC API: down.
Polygon network: down.
Optimism, Arbitrum, Linea, Base, Scroll chains: all down.
Six so-called "decentralized" Layer 2 networks collectively lost connection simply because they all relied on the same centralized channel to connect users.
During the Amazon Web Services outage, MetaMask users could not access Ethereum and Layer 2 networks, causing transactions to stall and Dapp interfaces to become unresponsive.
The issue was not on-chain, as validating nodes continued to operate and blocks were still being produced, but rather because the path to access the blockchain had to go through a single company's servers, which were built on Amazon's cloud infrastructure.
Coinbase and its Base App highlighted the centralization irony in the crypto industry's decentralization concept.
During the AWS service interruption, both Coinbase and the Base platform were temporarily unavailable, preventing users from logging in, trading, or withdrawing cryptocurrencies.
Coinbase has acknowledged the issue and stated that it is actively undergoing "architectural restructuring" to prevent similar interruptions in the future, which essentially admits that its infrastructure is not as decentralized as marketed.
Meanwhile, approximately 2,368 Ethereum execution nodes are hosted on AWS infrastructure, accounting for about 37% of the total Ethereum network nodes.
While this is not enough to stop the blockchain from running, it is sufficient to make it difficult for most users who do not operate their own nodes to access it.
If decentralized systems require centralized infrastructure to operate, what exactly are we decentralizing?
A Familiar Plot
On April 15, 2025, Amazon Web Services experienced "connection issues." Binance paused withdrawals, and KuCoin faced trading interruptions. MEXC, Gate.io, Coinstore, DeBank, Rabby wallet, at least eight platforms reported service interruptions within minutes.
Six months later: the script is almost identical.
Amazon Cloud holds about 30% of the global cloud market share, Microsoft Cloud holds 20%, and Google Cloud Platform holds 13%.
The three companies—Amazon, Microsoft, and Google—control 63% of the infrastructure that supports the internet, including the vast majority of the cryptocurrency "decentralized" ecosystem.
Binance operates on AWS, and so does Coinbase. BitMEX, Huobi, Crypto.com, Kraken—all these trading platforms rely on Amazon's infrastructure to meet users' demands for low latency and high throughput trading. Once Amazon's services fail, the leading platforms in the crypto market will also come to a standstill.
ManFromHell's tweet is not an exaggeration but an objective statement.
But the truth about real versus fake decentralization is clear: during the two AWS service interruptions, the XRP ledger maintained normal block production.
Validation nodes are distributed across AWS, Google Cloud, Hetzner, DigitalOcean, and independent servers. This distributed architecture means that no single point of failure can bring the entire network down.
Node contributor Vet pointed out: "This is precisely the challenge of achieving decentralization, especially in terms of geographic distribution and hosting."
Distributed infrastructure is indeed feasible, as long as there is a willingness to invest costs and a desire to build. However, most projects find it difficult to do so.
How many more failures must we endure before "decentralization" is no longer a marketing gimmick but a hard requirement?
A Major Outage in the Crypto World: A Global Focus
"When Amazon Cloud goes down, the entire network collapses. But the blockchain never… wait, I didn't say that. This crypto world is truly a joke. Everyone touts decentralization and anti-censorship, but in reality… they all rely 100% on cloud services." — Lefteris Karapetsas, founder of Rotkiapp
"The platforms that constantly preach 'decentralization' were taken down by a centralized cloud service provider. The irony is off the charts." Matt Flint voiced the shared sentiment of countless users regarding Coinbase.
"If a single AWS service interruption can affect your coin's price, then it is neither decentralized nor a true currency. Bitcoin is the way; altcoins are just air." Bitcoin maximalist Carla articulated the uncomfortable truth that protocol advocates have been calling out for years.
Lefteris Karapetsas swung the philosophical hammer again: "The original intention of blockchain was to create decentralized infrastructure, and we have completely failed on that path."
"It is not about struggling to survive or forging ahead; it is about complete failure."
Binance CEO Gracy Chen stated during the last AWS service interruption in April: "AWS data center issues affected several centralized exchanges, but there is no need to panic. This serves as a robust reminder: perhaps it is time to explore decentralized cloud services."
Half a year later, this statement still holds true.
Dr. Max Li, CEO of OORT, articulated a well-known yet rarely discussed solution: "Decentralized cloud computing provides a strong alternative by distributing data and processing power across the entire network, effectively reducing the risk of single points of failure."
Coinbase responded to public criticism by announcing it is "restructuring services" to prevent future interruptions. In plain terms, they finally admitted that their architecture contradicts their marketing slogans.
The service interruption did not immediately cause market turmoil, but it left people unsettled.
Suddenly, the conversation shifted to alternatives. If someone were to truly build a decentralized model, what would it look like?
Smart money never settles for complaining about centralization; it bets on alternatives.
When the slogans finally meet reality, will anyone still remember the original intention of decentralization?
Why Do Some Choose the Shortcut?
Operating self-hosted nodes means purchasing expensive hardware, ensuring stable power supply, maintaining bandwidth quality, and hiring truly skilled professionals, all of which imply high operational costs.
Amazon Web Services can provide equivalent services at a negligible cost, promising up to 99.99% uptime and backed by the reliability of infrastructure built over decades by Amazon.
For startups racing against time to seize market opportunities, this is a choice that requires no second thoughts.
Adopting a multi-cloud strategy is costly, and the technical barriers to building one's own infrastructure are obstacles that most teams find hard to overcome.
The latency issues brought by geographic redundancy are particularly sensitive for traders, as even a moment's delay can have significant repercussions.
All philosophical claims about decentralization ultimately collide with the harsh economic realities of the cloud computing field: centralized infrastructure is cheaper, faster, and "good enough" until one day it no longer meets the needs.
Most projects choose speed over autonomy, which is understandable. Imagine how you would explain to venture capitalists why you need to invest twice as much in infrastructure to uphold principles.
But there is another angle that many avoid discussing: the "Cloud Act," a law that allows the U.S. government to access data stored abroad.
Under U.S. law, authorities have the right to request data from U.S. cloud service providers, regardless of where that data is actually stored.
Whether the data is stored on servers in Europe or data centers in Asia, as long as it is hosted by Amazon Web Services, Microsoft Azure, or Google, U.S. law enforcement can access it with appropriate legal authorization, without needing approval from any foreign court.
This reality complicates the so-called "anti-censorship" claims of cryptocurrencies, especially when most of their infrastructure relies on servers bound by U.S. government data requests.
European regulators increasingly view the U.S. dominance in cloud computing as a sovereignty issue, with some authorities warning against using U.S.-based cloud services for sensitive data.
Decentralization promises freedom from institutional control.
However, most crypto infrastructure ultimately falls under the control of three companies bound by U.S. government regulations.
If your "trustless" system requires Amazon to ignore law enforcement requests, how "trustless" is it really?
The Hidden Costs of Shortcuts
Multi-cloud is not an esoteric technology; it involves distributing your infrastructure across AWS, Azure, and Google Cloud, and establishing cross-regional redundancy outside the Eastern U.S. region.
View the higher costs and complexities as necessary expenses to achieve true resilience.
The XRP ledger has validated its reliability. While other systems collapsed, distributed validation nodes across multiple cloud service providers ensured the network continued to operate.
This is not because XRPL technology is superior, but because they chose a different architectural path and paid the corresponding costs for redundancy.
Decentralized alternatives do exist, but they remain on the fringes.
Filecoin, IPFS, and Arweave offer decentralized storage solutions.
Akash Network provides decentralized cloud computing services.
The ICP protocol aims for full-stack decentralization.
These technologies are still in their early stages, and adoption is slow. Developers often choose familiar solutions, and what they are familiar with is AWS.
Vanar launched Neutron two weeks after the AWS outage in April to address such dependency issues.
Vanar CEO Jawad Ashraf stated: "This opens up new possibilities, from achieving purely on-chain file storage without reliance on third parties to querying and verifying the real information within files."
Meanwhile, every project faces the same choice: rent infrastructure from large tech companies and bear systemic risks, or build truly decentralized infrastructure and incur the corresponding costs.
There is no middle ground. You either rely on centralized providers or go it alone.
Most projects choose reliance simply because the current costs are lower, yet they remain blind to the price they will pay when Amazon's DNS failures become frequent.
How many billions need to be temporarily frozen before "temporary" becomes unacceptable?
On October 20, Ethereum continued to produce new blocks, and the Bitcoin network was also unaffected. All blockchain systems were operating normally, and each protocol was functioning precisely as designed.
The failure of the access layer exposed the most embarrassing secret of cryptocurrency: you can verify transactions to your heart's content, but if the permission to submit transactions is controlled by Amazon Cloud, then your autonomy is merely a performative illusion.
Two major outages within six months, with the same root cause but different locations.
The root of this flaw lies in economic costs: centralized infrastructure still has the advantages of lower costs and easier operations, causing various projects to continue to shadow the risks they are well aware of.
Cryptocurrency prides itself on adhering to the principle of "don't trust, verify," yet it simultaneously relies heavily on the normal operation of three companies; this dependency itself is a form of trust.
Originally built to escape institutional control, it has handed its lifeblood to the world's largest gatekeeper.
When the infrastructure layer is controlled by centralized entities, the decentralization at the protocol level becomes meaningless.
The next Amazon Web Services outage is bound to come, followed by a series of failures. Each outage will provoke outrage on Twitter, resulting in a uniform promise of improvements, yet after the crisis, people will inevitably fall back into the trap of convenience.
Cryptocurrency must undergo transformation, adopting multi-cloud architectures, deploying geographic redundancy systems, and developing truly decentralized alternatives; otherwise, it can only admit that its touted "decentralization" is merely old wine in new bottles, never able to escape the essence of traditional centralized systems.
When the next DNS failure from Amazon prevents you from accessing your "self-hosted" wallet, will you still firmly believe in the so-called trustless system?
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