Why Crypto’s Infrastructure Hasn’t Caught Up With Its Ideals

Distributed cloud projects aim to reduce blockchain’s heavy dependence on centralized providers like AWS.

Periodic service disruptions and capacity strain on centralized cloud infrastructure have created an opening for companies building distributed networks.

Supporters of the distributed approach argue that spreading workloads across several smaller nodes reduces concentration risk. They say the model could be especially valuable in sectors with high computing demand and low tolerance for downtime, such as AI, gaming and finance.

“Over time, as decentralized infrastructure matches or exceeds the performance of centralized clouds, reliance on single providers will naturally decline,” Carlos Lei, CEO and co-founder of DePIN-based connectivity marketplace Uplink, told Cointelegraph.

In today’s tech landscape, decentralized infrastructure often refers to blockchain, which is designed to distribute trust and reduce single points of failure by spreading verification and data storage.

However, the infrastructure that enables access to these networks still largely relies on centralized cloud platforms.

In 2024, Amazon Web Services (AWS), Microsoft Azure and Google Cloud — also known as the “Big Three” — accounted for around 68% of the global cloud infrastructure revenue, according to Synergy Research Group, making them the default hosting environment for many enterprise and blockchain applications.

But the concentration means that outages, pricing changes or regional capacity limits at any one of these providers can ripple across multiple industries.

“For example, with the AWS outage in October, Snapchat, Roblox, Fortnite, Kindle — all of them went down completely,” Nökkvi Dan Ellidason, CEO of tech infrastructure company Gaimin, told Cointelegraph. “Coinbase, which is a financial service, was affected massively.”

These major platforms lower upfront costs through programs that provide a cushion for startups. For most companies, moving away from the centralized cloud means taking back all the setup and maintenance work that big providers have handled for years and paying more to do it.

Source: CoinTelegraph