Crypto Ecosystem is Becoming Less Decentralized: Morgan Stanley

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Morgan Stanley (MS) stated in a research report on Wednesday that the crypto ecosystem is becoming less decentralized.

Although the underlying blockchains are decentralized, as crypto regulation evolves, the necessity to run a big portion of the blockchain on a single or small group of cloud providers becomes a possible problem, according to the paper.

As per the research, 65% of Ethereum nodes are cloud-hosted, with half of these using Amazon Web Services (AWS). This might become an issue if particular service providers decide to ban specific participants or crypto products, or if there are extended server outages.

Following the switch to proof-of-stake, the Ethereum blockchain has grown more centralized since only four organizations control 60% of the validators, according to the report.