Crypto's Illusion of Decentralization Exposed by Recent AWS Disruption

A significant outage occurred on Amazon Web Services (AWS) on October 20, 2025, causing widespread disruptions to thousands of websites and applications. Several major crypto exchanges and service providers, which heavily rely on cloud infrastructure like AWS, were affected. The incident took down trading platforms, wallets, and analytics tools, including those of Coinbase, ConsenSys' Infura, and Robinhood. The crypto community quickly pointed out that many companies in the industry are too reliant on centralized infrastructure, compromising their decentralization. Ben Schiller, Head of Communications at Miden, stated, 'If your blockchain is down due to the AWS outage, you're not sufficiently decentralized.' Maggie Love, creator of SheFi, echoed this sentiment, saying, 'If we cannot connect to the Ethereum mainnet when AWS goes down, we are not decentralized.' This is not the first time AWS has caused disruptions in the crypto landscape, as a similar incident occurred in April 2025. Infrastructure provider Infura reported that the outage affected multiple network endpoints, including Ethereum Mainnet, Polygon, Optimism, Arbitrum, Linea, Base, and Scroll. The incident exposed a central irony in the crypto industry: while layer-2 networks aim to decentralize execution and scale, many of their front-ends and infrastructure gateways still depend on centralized cloud services. Chris Jenkins, lead of infrastructure operations at Pocket Network, noted, 'The AWS outage reminds us that blockchain, and the internet itself, is only as decentralized as the infrastructure it runs on.' Others emphasized the need for true decentralization by building and operating on layer-1 blockchains. Jay Jog, co-founder of Sei Labs, said, 'Real decentralization is about resilience. Ethereum is decentralized. Sei is decentralized. The vast majority of L2s are not and could be bricked by a big enough Web2 outage.' The incident has highlighted the need for the crypto industry to decentralize its backend infrastructure, but whether this will lead to lasting change remains to be seen.