Why crypto’s infrastructure hasn’t caught up with its ideals – TradingView

Report on the Transition Towards Decentralized Digital Infrastructure and its Alignment with Sustainable Development Goals

Introduction: Addressing Centralized Infrastructure Deficiencies for SDG 9

Periodic service disruptions and capacity constraints within centralized cloud infrastructure have highlighted vulnerabilities in global digital systems. This has spurred the development of distributed networks, which align with the objectives of Sustainable Development Goal 9 (SDG 9) by aiming to build resilient, reliable, and sustainable infrastructure. Proponents of the distributed model argue that spreading workloads across numerous smaller nodes mitigates concentration risk. This approach is particularly valuable for sectors with high computational demands and low tolerance for downtime.

• Artificial Intelligence (AI)
• Gaming
• Finance

Carlos Lei, CEO of Uplink, notes that as decentralized infrastructure’s performance improves, reliance on single, centralized providers is expected to decline, fostering a more robust and innovative industrial base as envisioned by SDG 9.

The Dominance of Centralized Providers and Associated Risks

In 2024, the global cloud infrastructure market remains heavily concentrated, with Amazon Web Services (AWS), Microsoft Azure, and Google Cloud accounting for approximately 68% of revenue. This concentration poses significant risks to digital resilience.

• Service outages at a single provider can cause widespread disruptions across multiple industries.
• Pricing changes or regional capacity limits can have cascading economic effects.
• Recent outages, such as the AWS disruption in October, impacted major services including Snapchat, Roblox, Fortnite, and financial platforms like Coinbase, demonstrating the fragility of this centralized model.

While these platforms offer cost benefits for startups, the systemic risk they create runs counter to the principles of building resilient infrastructure under SDG 9.

Decentralization as a Catalyst for Sustainable and Inclusive Infrastructure (SDG 9 & SDG 8)

The Paradox of Blockchain’s Centralized Foundation

Blockchain networks are inherently designed to distribute trust and eliminate single points of failure. However, a significant portion of their underlying infrastructure operates on the same centralized cloud platforms they seek to replace. This dependency undermines the core decentralization principle and hinders progress towards a truly resilient digital ecosystem.

1. A study at the Usenix Security Symposium identified AWS as the single largest hosting provider for mapped Ethereum validators.
2. A 2023 Messari analysis confirmed that a majority of validators utilize centralized servers for their predictable performance and ease of setup.

This reliance creates a critical vulnerability, as demonstrated when AWS outages directly impacted the functionality of blockchain-based financial services like Coinbase and Robinhood.

Emerging Distributed Models and Economic Empowerment (SDG 8)

A new wave of infrastructure projects is exploring distributed alternatives that contribute to both resilient infrastructure (SDG 9) and inclusive economic growth (SDG 8). These networks aim to source capacity from underutilized consumer hardware and regional data centers, creating new economic opportunities.

• Gaimin: This network sources GPU power from gaming PCs, creating a geographically dispersed network that reduces single points of failure and allows individuals to monetize idle computing resources, contributing to decent work and economic growth (SDG 8).
• Uplink: This marketplace enables individuals and local operators to sell excess bandwidth, reducing reliance on major telecommunication carriers and fostering a more inclusive digital economy.
• Modular Alternatives: Platforms like Filecoin, Arweave, Akash, and Render Network offer decentralized options for data storage, computing, and GPU rendering, diversifying the infrastructure landscape.

A Hybrid Future for Resilient and Sustainable Digital Ecosystems (SDG 11 & SDG 17)

The Hybrid Cloud Model

The future of digital infrastructure is increasingly viewed as a hybrid model rather than a complete replacement of centralized systems. This approach involves a strategic mix of different infrastructure types to enhance fault tolerance and efficiency, reflecting the collaborative spirit of SDG 17 (Partnerships for the Goals).

• Hyperscale cloud providers (e.g., AWS, Azure)
• Edge networks
• Bare-metal servers
• Decentralized consumer-sourced networks

This model allows for traffic to be automatically rerouted during regional outages, ensuring service continuity. As stated by Yair Cleper of Lava Network, this allows teams to “start simple and add diversity as the business demands, without needing a rebuild.”

Conclusion: Fostering Fault-Tolerance and Inclusivity

The ongoing shift towards distributed and hybrid cloud models is not about abandoning centralized providers but about creating a more fault-tolerant, resilient, and inclusive digital ecosystem. This evolution directly supports several Sustainable Development Goals. By creating space for smaller, regional infrastructure providers and leveraging underutilized resources, this movement promotes:

• SDG 9: Building resilient, reliable, and sustainable digital infrastructure.
• SDG 8: Fostering inclusive and sustainable economic growth by creating new markets for individuals and small operators.
• SDG 11: Contributing to sustainable communities by promoting efficient resource use and enhancing the reliability of digital services.

Analysis of Sustainable Development Goals in the Article

1. Which SDGs are addressed or connected to the issues highlighted in the article?

• SDG 9: Industry, Innovation and Infrastructure: This is the most prominent SDG in the article. The entire discussion revolves around digital infrastructure, its resilience, concentration risks, and the innovation of decentralized and hybrid cloud models to create more robust and fault-tolerant systems. The article explicitly discusses building “resilient networks” and upgrading technological infrastructure.
• SDG 8: Decent Work and Economic Growth: The article touches upon economic growth by discussing the creation of new markets and business models (e.g., Uplink, Gaimin). It also highlights how the shift towards decentralized models can create “space for smaller regional infrastructure providers to fill the gaps,” fostering entrepreneurship and the growth of small and medium-sized enterprises in the tech sector.
• SDG 11: Sustainable Cities and Communities: This goal is relevant through its focus on making infrastructure resilient. The article’s central theme is mitigating the risks of centralized infrastructure failure, which can disrupt essential services for communities, as seen with the outages affecting finance (Coinbase) and communication/entertainment (Snapchat, Roblox). Building a “geographically dispersed network where no single region becomes the point of failure” directly contributes to resilient infrastructure, a key component of sustainable communities.

2. What specific targets under those SDGs can be identified based on the article’s content?

1. Under SDG 9 (Industry, Innovation and Infrastructure):
   • Target 9.1: “Develop quality, reliable, sustainable and resilient infrastructure…” The article directly addresses this by highlighting the unreliability of over-centralized systems (“Periodic service disruptions and capacity strain”) and proposing decentralized solutions to build more “resilient networks” that are “fault-tolerant” and “reduce single points of failure.”
   • Target 9.c: “Significantly increase access to information and communications technology…” The article mentions Uplink, a marketplace that “allows individuals and local operators to sell excess connectivity to applications that need more coverage.” This model is an innovative approach to increasing connectivity and network access.
2. Under SDG 8 (Decent Work and Economic Growth):
   • Target 8.2: “Achieve higher levels of economic productivity through diversification, technological upgrading and innovation…” The article is a case study in technological innovation, discussing the shift from centralized cloud models to “decentralized infrastructure” like blockchain and hybrid systems. This diversification is presented as a way to improve performance and reduce risk.
   • Target 8.3: “Promote… entrepreneurship, creativity and innovation, and encourage the… growth of micro-, small- and medium-sized enterprises…” The article explicitly states that the shift away from the dominant “Big Three” is “creating space for smaller regional infrastructure providers to fill the gaps,” which directly supports this target.
3. Under SDG 11 (Sustainable Cities and Communities):
   • Target 11.b: “…develop and implement… holistic disaster risk management at all levels.” The article’s focus on mitigating the widespread impact of single-provider outages (“with the AWS outage in October, Snapchat, Roblox, Fortnite, Kindle — all of them went down completely”) is a form of disaster risk reduction for critical digital infrastructure. The proposed solutions aim to prevent such cascading failures.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

Yes, several indicators are implied in the article:

• Indicator for Market Concentration (Target 8.3): The article states that the “Big Three” (AWS, Microsoft Azure, Google Cloud) “accounted for around 68% of the global cloud infrastructure revenue.” A direct indicator to measure progress would be the percentage of market share held by the top three cloud providers. A decrease in this percentage would signify a more diverse and competitive market, with more room for smaller providers.
• Indicator for Infrastructure Resilience (Targets 9.1 and 11.b): The article repeatedly mentions service outages, such as the “AWS outage in October” and “Azure in November.” An implied indicator is the frequency and impact of major cloud service outages, measured by the number of affected industries and users (e.g., “Coinbase, which is a financial service, was affected massively”). Progress would be a reduction in the frequency and scope of these disruptions.
• Indicator for Decentralization of Network Infrastructure (Target 9.1): The article notes that a “big share of validators runs on commercial cloud infrastructure.” It cites a study identifying AWS as the “single largest hosting provider among the Ethereum validators… accounting for roughly one in five.” An indicator for progress would be the percentage of blockchain validators or nodes running on decentralized or independent hardware versus centralized cloud platforms. A decrease in reliance on centralized platforms would indicate a more resilient and truly decentralized network.

4. Summary Table of SDGs, Targets, and Indicators

Source: tradingview.com