Cloudflare Outage Affects Crypto Infrastructure Including Coinbase
While the Bitcoin network of miners is unstoppable, related crypto services rely on the current internet infrastructure.
A brief outage of Cloudflare affected multiple services within the cryptocurrency ecosystem, including the Coinbase brokerage. The event pointed out the fact that the current cryptocurrency infrastructure remains tied up to regular Internet technologies.
The outage also affected some exchanges and services. MyEtherWallet and potentially other online wallets were affected.
CloudFlare announced the failure was due to deploying faulty software and quickly reversed to full service.
The outage also led to spreading misleading information about Bitcoin (BTC) market prices. Displaying a price of $26 may have contributed to some panicked selling, coinciding with the BTC dive below $10,000.
While decentralized networks are extremely robust, the usage of BTC relies on a multitude of services. Thus, various coin networks potentially display vulnerabilities.
In theory, BTC nodes could be muted or receive faulty information, through reliance on regular Internet connections and routing. Additionally, some Bitcoin nodes, and nodes for altcoins rely on cloud services such as AWS. In the past, some mining has also been done by hired computing power.
Another dependence is the system of Content Delivery Networks (CDN), which for now rule out pure peer-to-peer interaction.
In 2019, the crypto ecosystem has grown much farther, with multiple new networks offering various types of services. Dependencies on current internet technology may now potentially affect many types of projects.
The Bitcoin network still carries more than 10,000 nodes, and the count remains relatively stable. Newer networks rely on a series of known servers or delegates, and their services allow for downtime for some of the servers.
Other hidden dependencies include the networks themselves. The IOTA network will spend more time with a single server for verifying transactions, before unrolling a new consensus mechanism.