On May 16, Cloudflare, an internet security firm, announced in a blog post that the firm is expected to manage and take full-stake of Ethereum validator nodes “in the coming months.” According to the sources, it is stated that Cloudflare’s infrastructure handles around 20% of all internet traffic. Now they’re taking stake of ETH to run an Ethereum Consensus Layer node. The blog post reads:
“Over the next few months, Cloudflare will launch, and fully stake, Ethereum validator nodes on the Cloudflare global network as the community approaches its transition from Proof of Work to Proof of Stake with “The Merge.”
When Ethereum’s mainnet and the PoS-based Beacon Chain unite, it’s referred to as “the Merge.” Following the takeover, Ethereum 2.0 (now known as the “Consensus Layer”) will be operational. Cloudflare is committed to playing a small part in the transition to Ethereum 2.0. After the takeover, Ethereum will move from a proof-of-work (PoW) blockchain, where transactions are approved by miners with a lot of computing power to a proof-of-stake (PoS) blockchain, where the miners who put up the most collateral validate the most transactions.
According to the company, the move comes as Cloudflare is “finding new ways to help solve the scale and environmental challenges that face blockchain technologies today.” While acknowledging that PoW is quite secure, it goes on to say:
“While that process is incredibly secure because of the vast amount of hashing that occurs, Proof of Work networks are wasteful. This waste is driven by the fact that Proof of Work consensus mechanisms are electricity-intensive. “
The Ethereum Gateway was implemented in 2019 via RPC nodes, allowing users to interface with the Ethereum network. This was included in their Distributed Web Gateway and demonstrated their use of web3 utilities for clients. After the Ethereum Consensus Layer transitions to proof of stake, Cloudflare noted that it will stake Ethereum to participate in the Ethereum Consensus Layer. Most of the web2 ecosystem will fall down if Cloudflare goes down, including Coinbase, Shopify, Discord, Canva, Robinhood, SoundCloud, Medium, Pinterest, and Dropbox.
Many people hold these beliefs, yet they overlook the reality that power and garbage are not inextricably related, as we recently documented:
“It is important to note that energy usage is not directly correlated to carbon emissions. When you consider this, Bitcoin likely contributes 23 megatons to carbon emissions out of the 31,500 megatons released globally, or 0.07%. “
Apart from Bitcoin maximalists who will object to Cloudflare’s depiction of PoW, this is a very encouraging indication for crypto, particularly Ethereum. Cloudflare also mentions another alternative to PoW, which may make Chia bulls happy:
“We believe that the next generation of consensus protocols is likely to be based on Proof of Stake and Proof of Spacetime consensus mechanisms.”
Cloudflare remarked that it will not exclusively run on Ethereum nodes in the future, implying that it is “only getting started with Ethereum.” However, the statement concludes on a positive note, noting:
“This is just the start of our commitment to help build the next generation of web3 networks. We are excited to work with our partners across the cryptography, web3, and infrastructure communities to help create the next generation of blockchain ecosystems that are environmentally sustainable, secure, and blazing fast. “
In order for web3 to scale, it requires partners like Cloudflare to assist in building infrastructure. While relying on centralised services does not convey the intended image of a decentralised web, it will not be achievable without the involvement of some of the most powerful actors. Cloudflare’s experiment will include an unknown number of nodes, but each validator node requires 32ETH to join the network.
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