Inside the competition for Web3’s infrastructure

People interact every day with open source applications such as MetaMask, Web3 games, metaverse and DeFi protocols. If we think of Web3 as a growing new city, the node is the basic power grid on which infrastructure providers make operations possible.

All DApps need to interact with blockchains, and full nodes deliver billions of requests every day to read and write data from DApps. We need a large node infrastructure to keep up with the ever expanding DApp ecosystem and serve all demands. However, running nodes requires more time and capital, so DApp builders turn to remote access providers for nodes. There is a huge cash incentive for infrastructure providers to gain as much power as possible in these Web3 ecosystems, but who has won this race so far?

Centralization problem

The quickest way to provide reliable infrastructure for DApp ecosystems is for centralized companies to set up blockchain nodes, typically located on Amazon Web Services (AWS) data centers, and allow developers to access it from anywhere with a subscription. Some players in space did just that, but it came at the cost of centralization. This is a major issue for Web3 Economy because it attacks the ecosystem and is at the mercy of some powerful players.

More than 80% of Ethereum terminals are located in the United States and Germany, and note that the three largest mining pools together could hit 51% of the network. In many ways, today’s blockchains are more centralized than we would like them to be, completely contrary to the protocols first mentioned in Satoshi Nagamoto’s Bitcoin (BTC) white paper.

If large terminal providers were to join forces, Web3 would lose all the advantages of Web2, ranging from anti-censorship to reliability, and only its disadvantages ranging from relatively high fees to low transaction performance.

Not only that, but relying on centralized providers also opens the door to failure. For example, cryptocurrency exchanges and wallets such as Coinbase Wallet, Binance and MetaMask were forced to suspend Ethereum and ERC-20 token withdrawals due to the failure of Infra because they could not fully trust their nodes.

Amazon, which is the backbone of many of these centralized providers, has experienced a number of failures in the past and has created another layer of vulnerability. Ethereum’s Infura is not the only crash. Most recently, Ethereum’s move to Ethereum 2.0 was pushed back with a 7-hour crash due to a terminal hardware failure on the network. This is not to worry about real decent networks.

Decentralization is a key principle of the Web3 economy, and the centralized blockchain infrastructure threatens to undermine it. For example, Solana has experienced a number of malfunctions due to the lack of adequate, decentralized nodes to handle spiking traffic. This is a common problem for blockchain algorithms that try to measure.

Related: Scaling or consistency? Solana network malfunctions show that work is still needed

It’s not just Solana. Many better blockchain protocols are struggling to find a way to measure and further disseminate. In fact, while large blockchains such as Ethereum and Bitcoin were firmly in the battle for decentralization, smaller blockchains failed in the war, with 51% of attacks at the hands of overly centralized node providers.

For example, on June 8, 2013, Feathercoin (FTC) suffered a 51% attack. This means that a single company can control more than half of the total processing power of the FTC network. This allowed you to modify confirmed transactions and stop new transactions.

At the same time as the FTC attack, the website came under DDoS attack. This makes it difficult for users to access information about the attack or attempt to withdraw their money from the network. Since then, the FTC has been in the dark. Its price has dropped, and it is not listed in any major transactions.

This historic centralization owes much to the reliance on Web2 cloud providers such as AWS and Infura, which have hitherto been the primary providers of infrastructure for the Web3 economy. But now, decentralized infrastructure providers are stepping up to avoid the centralized and blockchain’s proverbial “single point of failure”. This is good news for the chance that the Web3 ecosystem will be healthy and decentralized.

Decentralized infrastructure provides better solutions

Fortunately, recent innovations are creating a new breed of highly decentralized provider. These providers do not trust centralized cloud providers and operate the terminals on campus or even in users’ homes.

Although centralized providers have a start-up, decentralized providers are emerging as the most viable alternative. Their main advantage is that they cannot be removed by a single point of failure and in many cases provide quick connections to users worldwide. Furthermore, decentralized infrastructure providers are creating new economies where independent providers deliver requests for data and receive rewards on their own tokens. These new types of providers are quickly gaining market share and can even replace existing executives of the Web3 infrastructure.

Related: Deployment, DAOs and current Web3 concerns

The competition is heating up

There are various providers in space such as Ankr, Flux and QuickNode that compete for market share. This competitive environment is good for the Web3 economy because it leads to innovation and lowers prices. This ensures that providers continue to strive to improve their services and provide a better experience for their customers.

More importantly, decentralized competition competition is increasingly expanding the Web3 economy. This is a good thing because it makes the economy more flexible against attacks and censorship. 51% of attacks in the past must have been in the past, with infrastructure providers spread across various geographical areas.

Related: Web3 participation depends on the economy, and that is what is missing – participation

This competition between providers will be essential to maintaining a healthy and decentralized ecosystem.

Realize the promise of Web3

Web3’s promise is not only to create a better web, but also a better world. Decentralized infrastructure providers lay the foundation for the new Internet, which is highly equitable, secure and anti-audit.

By maintaining the current status quo, centralized hosting providers fail to provide real findings and are subject to censorship. Decentralized infrastructure providers, on the other hand, are encouraged to provide better service with a democratic framework, ensuring that they are more resistant to censorship and attacks.

This article does not cite its references or sources. Every investment and business activity involves risk, and readers should carry out their own research when making decisions.

The ideas, thoughts and opinions expressed herein belong to the author and do not necessarily reflect or represent the views and opinions of the Cointelegraph.

Gregory Cobman He is a technology entrepreneur working in the blockchain space, where he serves as Chief Marketing Officer at Ankr, and runs a blockchain consultancy called Mewn to help launch projects and increase their rating. Greg has worked in startups for 15 years – 10 years with Silicon Valley technology companies, and 5 years to develop crypto projects. He is the co-founder of Akash Network and Angelhawk and is credited with helping Kadena grow from $ 80 million to $ 4 billion in 100 days.