Content delivery network Cloudflare has announced it will run Ethereum 2.0 nodes to support the development of a more robust, efficient internet.
Ethereum, the decentralized application platform, aims to be a core building block of web3. To understand web3’s goals, it helps to contrast it with earlier phases of the web:
- Web1 (~1990–2005) – Built on open protocols, decentralized and community-oriented, but limited in functionality.
- Web2 (~2005–present) – Characterized by centralized platforms and service silos controlled by a few large companies. Functionally powerful but prone to concentrated control and privacy concerns.
- Web3 (present–) – Seeks to combine web1’s decentralization and community governance with web2’s richer functionality.
Ethereum is in the process of moving from the energy-intensive Proof of Work consensus model—used by Bitcoin—to a far more energy-efficient Proof of Stake system.
In a company blog post, Cloudflare explained:
“At Cloudflare, we are committed to helping to build a better Internet. That commitment balances technology and impact. The impact of certain older blockchain technologies on the environment has been challenging.
The Proof of Work (PoW) consensus systems that secure many blockchains were instrumental in the bootstrapping of the web3 ecosystem. However, these systems do not scale well with the usage rates we see today.”
Currently, Ethereum 2.0 runs as a “beacon chain” that cannot yet host decentralized applications (dapps). The Merge—planned for Q3/Q4 2022—will unite the Ethereum mainnet with the beacon chain, enabling dapps to operate on the new Proof of Stake network.
After the Merge, Ethereum’s overall energy consumption is projected to fall dramatically, potentially using as little as 2.6 megawatts in total—approximately 99.5% less than current levels.
“Cloudflare is going to participate in the research and development of the core infrastructure that helps keep Ethereum secure, fast, as well as energy-efficient for everyone,” the company said.
Over the coming months, Cloudflare plans to deploy and fully stake Ethereum validator nodes to help secure and maintain the network.
“At Cloudflare, we often take experimental bets on the future of the Internet to help new technologies gain maturity and stability and for us to gain deep understanding of them,” the company added.
Cloudflare noted rapid growth over the past two years in the technologies underlying web3, a surge that has helped spawn a new generation of startups.
Ethereum faces increasing competition from blockchain projects that already use Proof of Stake or similarly efficient consensus algorithms and that aim to address some of Ethereum’s challenges, such as slower transaction throughput and high fees. In its post, Cloudflare mentioned several notable competitors.
“The next generation of blockchains like Flow, Avalanche, Solana, and Polygon are being developed and adopted by major companies,” the company wrote.
Ethereum still leads in developer activity, recognition, the number of dapps, and investment. However, networks like Solana and Polygon already handle more daily transactions in some cases, and other projects are rapidly closing the gap as users and developers look for lower costs and faster performance.
The Merge represents the beginning of a multi-year effort to scale Ethereum to meet modern web demands and lower fees. While some competing chains trade off aspects of decentralization for performance, many users are willing to accept those trade-offs to access practical web3 platforms today.
For now, Cloudflare appears to be placing its support behind Ethereum as it transitions to Proof of Stake and pursues broader scalability improvements.
(Image Credit: Cloudflare)
Related: Web 3.0 is on the horizon and some companies are positioning to adopt it.
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