Cloudflare experienced a major outage on Tuesday, leading to widespread service disruptions across thousands of websites and applications.
Several large centralized encryption services rely on Cloudflare to handle large volumes of traffic. BitMEX faced an outage, and Telegram-linked blockchain Toncoin also experienced significant downtime. But the outage extended beyond cryptocurrencies, with platforms like X and ChatGPT also down, affecting millions of people.
This episode comes just weeks after Amazon Web Services (AWS) suffered an outage, cutting off access to major blockchains such as Coinbase’s Base chain and Infura, which powers many blockchains.
Tuesday’s outage reignited debate about the need to distribute infrastructure to keep the internet running.
“Today’s Cloudflare outage shows how vulnerable the digital economy has become. When a single upstream provider encounters a problem, the impact is irresistible and ripples across the industry, impacting everything from social media platforms to e-commerce checkouts to back-end payment services,” Fadl Mantash, chief information security officer at Tribe Payments, said in an email to CoinDesk.
“Payments are particularly at risk. The infrastructure behind a single transaction relies on a chain of cloud platforms, processors, third-party APIs, authentication tools, and card schemes. If any link in that chain fails, the entire process can be disrupted,” Mantashe added.
Some in the cryptocurrency industry are calling for wider adoption of DePIN to address such issues. DePIN (Decentralized Physical Infrastructure Network) uses blockchain incentives to coordinate and reward the people who build and maintain real-world infrastructure. This includes everything from wireless networks to sensors to energy systems, but the goal is to be independent of a central company. Users thus provide hardware or services and earn tokens in return, creating an open infrastructure layer run by the community.
One of the leaders driving this is the CEO of Gaimin, a DePIN project focused on cloud infrastructure distribution. Nökkvi Dan Ellidason said, “We need to move to a truly distributed cloud model. By leveraging existing globally distributed resources such as underutilized PCs, Gaimin is building a network with capacity distributed across regions and continents, making it difficult for a single error to bring down the entire global system.”
“This is the only way to protect the digital economy from the inevitable vulnerabilities of centralization,” added Dan Elidason.
Read more: Cloudflare’s global failure extends to cryptocurrencies. Multiple front ends are down
