- Amazon Web Services experienced a brief outage leading to several cryptocurrency exchanges inability to process transactions.
- Amazon’s ECs, S3, Lambda and AWS Data Exchange power leading exchanges including Binance and Kucoin.
- AWS outages have also occurred in the past affecting day-to-day transactions then too.
One of the world’s leading technology chains, Amazon, experienced a little trouble with their web hosting services. Several huge websites such as LinkedIn, Netflix and others make use of the service’s hosting prowess. The natural flexibility it offers makes it a prime candidate to host ever elongating and huge blockchains which attracted the eye of several crypto exchanges. Along with the world’s largest exchange, Binance, AWS also hosts smaller exchanges such as Huobi, Kucoin, Bitmax and FTX.
Transactions severely impaired
It all started when Amazon’s Tokyo Elastic Compute Cloud servers began to overheat and subsequently crash early in the morning. As transactions were scarce at that time, the load was automatically balanced through other servers in the region. However, as trading began to pick up, the load increased which led to a subsequent crash. The effect was felt throughout the world and led to severe impairment in the normal functioning of the crypto exchanges. Binance CEO took to Twitter to express his displeasure and stated that this issue hit balance synchronizations of a slight number of users only while also assuring users that their employees were working hard to figure it out. There was speculation as to the issue being related to a previously reported Ethereum congestion problem, however, they remain unconfirmed. Huobi Global, Kucoin and Bitmax noted that there was trouble with several users’ authentication and trading. However, they expressly stated that none of the accounts was affected as the databases all remained safe.
Is decentralization the way forward
For an entity centred around blockchains whose main theme is decentralization, there appears to be a paradox in the functioning of cryptocurrency exchanges. Only a single web service company is contracted by the exchange firms to provide elastic and scalable web services, which, in principle, leads to a centralized mode of operation. Though crypto firms have been affected in the past too, the exchanges show no sign of migrating to a more decentralized method to organize their operations as unless it’s a major blackout, most problems are addressed to and resolved within 48 hours leading to no long-term and far-reaching consequence of service outages.