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7th November 2022 > > Centralisation.

tl;dr

The dark forces of Sauron centralisation are at work.


Market Snap








Market Wrap

It was very disappointing for me to see at 5.30am today that we had lost the 21 handle.


Curious Cryptos’ Commentary – Cloud computing and Solana

Solana is a Layer-1 blockchain designed to host dApps (decentralised applications). It uses a proof-of-history consensus mechanism, powered by its native token SOL.


Launched only in 2017 the market cap is a decent $13bn though at the height of the last bull market it was nearly six times that value.


Validators run Solana nodes using cloud computing functionality. One of these providers – Hetzner Online GmbH – turned off 1,000 of these nodes a couple of days ago. These nodes made up 40% of all validators and 20% of the total network stake.


To be fair to Hetzner, the company had warned earlier this year that its product offering should not be used for crypto mining or validating:


“Using our products for any application related to mining, even remotely related, is not permitted. This includes Ethereum. It includes proof of stake and proof of work and related applications. It includes trading. It is true for all of our products, except colocation. Even if you just run one node, we consider it a violation of our ToS.”


It isn’t clear why Hetzner takes this stance, but they are perfectly entitled to do so, and they really do not need to justify their decision – however short-sighted and wrong it maybe – to me.


Though most of the nodes previously hosted by Hetzner are back up and running on rival cloud platforms, this is a salutary lesson that however decentralised a network may become, it is nigh on impossible to avoid relying on centralised structures, with the obvious exception being the mighty BTC.


Which incidentally explains why no crypto will ever truly challenge the hegemony of BTC.


Curious Cryptos’ Commentary – Tornado Cash and Ethereum

Tornado Cash – a privacy mixer that has been sanctioned by OFAC (The Office of Foreign Assets) – is, as has previously been reported in the CCC, back up and running.


Flashbots provide open source MEV (Maximum Extractable Value) software for free which improves validators’ profitability per block by up to 135%. This cost is borne by ETH users like you and me, and it is a subject to which we will return. But for today’s CCC, all we need to know is that Flashbots complies with the sanction placed on Tornado Cash by OFAC.


It has been reported that up to 75% of all validators now reject transactions emanating from Tornado Cash, a number that has been increasing weekly.


The arms of centralising forces are long indeed.

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