The recent Amazon Web Services (AWS) outage exposed major vulnerabilities in blockchain networks that depend on centralized cloud infrastructure. Multiple Layer 1 and Layer 2 chains suffered disruptions as AWS services went down. However, the Hedera Hashgraph Network remained fully operational, reinforcing its architectural commitment to true decentralization and high availability even under stress. This event has sparked a renewed industry-wide conversation about the risks of over-reliance on centralized infrastructure in a supposedly decentralized ecosystem.
major @awscloud outage observed today — where “decentralized” L1/L2 networks with an over-reliance on AWS for node ops experienced downtime
— brady 🌴 (@bmgentile) October 20, 2025
🌐 the @hedera network did not have this problem… check out this blog I wrote in 2023 as to “why”
🔗https://t.co/ApXBXV74T3 pic.twitter.com/Maf7ehw2CG
The Ripple Effect of AWS Dependency
When AWS reported issues with its DynamoDB database service in the US-EAST-1 region, the impact cascaded across the crypto ecosystem. Major platforms like Coinbase faced service disruptions, while several Ethereum Layer-2 networks struggled to maintain normal operations. The incident affected Infura, a crucial infrastructure provider connecting crypto wallets to various blockchains, disrupting user access to networks like Optimism, Arbitrum, and Base.
Hedera’s Distributed Architecture Advantage
While other networks struggled with the AWS outage, Hedera demonstrated remarkable stability. This resilience stems from Hedera’s strategic approach to node hosting diversification. The network maintains a distributed architecture where consensus nodes operate across multiple cloud providers and independent data centers. This deliberate design choice helps prevent single points of failure from compromising network operations.
The Centralization Paradox in Blockchain
The AWS incident highlights an ongoing challenge in the blockchain industry. Despite blockchain’s foundation in decentralization principles, many networks have become dependent on centralized cloud services. Current data shows AWS hosts approximately 37% of Ethereum’s execution layer nodes, creating a concentration risk that contradicts the core promise of decentralized networks. This reliance on centralized infrastructure providers presents both operational and philosophical challenges for the industry.
Building More Resilient Networks
The path forward requires a balanced approach to infrastructure deployment. While cloud services offer convenience and cost benefits, networks must prioritize hosting diversity to maintain true decentralization. Emerging solutions like decentralized storage protocols and distributed computing networks offer promising alternatives, though they face challenges in matching the scale and efficiency of established cloud providers. The experience of networks like Hedera provides a blueprint for achieving this balance through thoughtful architecture and deliberate node distribution strategies.
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