The Ethereum network continues to evolve, but its geographic distribution remains a subject of monitoring for researchers. A new study from the Cambridge Center for Alternative Finance shows that a significant share of nodes operate in North America and Europe. This photograph of the network highlights several technical and legal issues. She also recalls that the location of infrastructure can influence the resilience of the protocol. The updated data finally sheds new light on the energy consumption of the network after the merger.
In brief
- 31% of Ethereum nodes are hosted in the United States, compared to 39% in the European Union excluding the United Kingdom.
- The network may stop finalizing its transactions if more than a third of validators simultaneously become inactive.
- The concentration of infrastructure and client software remains a major challenge for the resilience and decentralization of Ethereum.
- Ethereum’s energy consumption has fallen by around 99.98% since the merger, according to the new Cambridge study.
Ethereum: a geographical distribution dominated by the United States and Europe
The new study indicates that 31% of Ethereum activity today is hosted in the United States. The European Union, excluding the United Kingdom, accounts for around 39% of this activity. In a statement attributed to the daily show The Starting Block, Alexander Neumuller, head of research at the Cambridge Center for Alternative Finance, believes that the distribution remains heavily skewed towards Western countries. However, it does not reflect excessive concentration in a single State.
The researchers also observe that the nodes rely heavily on three major hosting providers: Hetzner, AWS and OVH. Alexander Neumuller recalls that Hetzner’s terms of use previously prohibited the operation of blockchain services. However, he specifies that this policy could have evolved. This concentration of infrastructure therefore deserves continued attention, even if the data do not show a unique national imbalance.
L’study also highlights that the relationship between nodes and validators remains difficult to measure precisely. The same access point can in fact host several validators. The researchers explain that it remains impossible to know exactly the number of validators associated with each infrastructure.
The threshold of one third remains a point of vigilance for the network
The conclusions of the analysis recall an important feature of the functioning of Ethereum. Contrary to popular belief, the network does not need to lose half of its validators to encounter a problem. As soon as more than a third of validators cease their activity simultaneously, the finalization of checkpoints may be interrupted.
This situation explains why the distribution of Ethereum nodes represents a strategic element for the stability of the network. An outage affecting widely used infrastructure could slow down overall operation. Alexander Neumuller nevertheless specifies that the available data does not make it possible to establish a direct link between each node and the exact number of validators it hosts.
Concentration is not just about physical infrastructure. According to the researcher, the diversity of client software also plays an essential role. A technical fault affecting a dominant client could quickly propagate across a large part of the network. The report therefore presents detailed data on the distribution of consensus clients and execution clients in order to illustrate this other risk factor.
A new energy estimate and persistent legal issues
The location of nodes goes beyond the simple technical framework. In 2022, the United States Securities and Exchange Commission (SEC) had estimated that it could claim jurisdiction over Ethereum. The authority relied in particular on the fact that a majority of the network’s infrastructure was then hosted on American territory. This question therefore continues to fuel discussions around the legal framework applicable to transactions.
Alexander Neumuller nevertheless presents the current geographical distribution as a balance that he considers positive, while specifying that this is his personal assessment. According to him, better geographical distribution constitutes an advantage for a decentralized network.
Geographic distribution constitutes a real asset for the resilience of the network, even if the community must continue to monitor its evolution. At the same time, a high concentration of client software could amplify the consequences of a bug affecting the most used client.
Alexander Neumuller, head of research at the Cambridge Center for Alternative Finance, Source: The Block.
He also believes that a high concentration of client software risks quickly spreading the effects of a bug affecting the network’s main client. On this note, the community must continue to monitor this development carefully.
The report also updates Ethereum energy estimates using a new methodology. Researchers now use empirical data on the distribution of nodes between residential and commercial accommodation, rather than theoretical assumptions. This approach takes into account software changes occurring after the merger, which can modify equipment consumption.
THE new estimates estimate the annual consumption of the network at approximately 7.9 gigawatt hours, the equivalent of a continuous power of one megawatt. This corresponds to the consumption of around 2,000 UK households. The study also estimates that this consumption remains approximately 99.98% lower than the levels observed before the merger. Finally, the share of sustainable energy used by the network now exceeds 56%, compared to an estimated global average of 43%.
The researchers also assess the theoretical cost of fully offsetting annual emissions with high-quality carbon credits. This would be between 25,000 and 55,000 pounds sterling, an amount that Alexander Neumuller compares to the price of a car. He indicates that this estimate is the result that surprised him the most. The Ethereum Foundation supported this study, while the researchers clarify that their analyzes on decentralization are their own interpretation. The next observations will make it possible to measure whether this geographical distribution continues to evolve while preserving the resilience of the network.
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