Are Blockchain and Decentralized Cloud Making Much Headway?

There continues to be chatter about such elements of Web 3.0 stirring up the cloud scene, but the impact thus far may be limited to niche use cases.

Joao-Pierre S. Ruth, Senior Editor

May 9, 2022

3 Min Read
JL via Alamy Stock Photo

There is some debate about potential benefits of hosting cloud computing on a centralized or decentralized network, and whether the blockchain might pose some relevance on such a front. The answer seems to be a definite maybe -- under certain circumstances.

Avivah Litan, vice president and analyst with Gartner, says blockchain enables decentralized cloud computing, which can stir up some hype of new approaches to compute and Web 3.0. “In that sense, it is disruptive to the centralized guys,” she says. “It’s not going to disrupt the industry overnight; I don’t see it happening that quickly.”

Decentralized cloud computing may be an alternative that might even make sense for some non-blockchain applications, Litan says. Still there can be reluctance within organizations to move workloads fast in this direction, she says. However, with certain applications, such a move can be a way to save money.

Dipping into this arena means accepting a nebulous, almost amorphous form of cloud computing. Blockchain’s decentralized architecture typically means never running in just one environment, Litan says. “If you look at a blockchain of 10,000 nodes, you can run your nodes anywhere you want.” With Bitcoin or Ethereum miners who are mining, she says, they can set up their nodes on-prem or any on cloud they choose. In that sense, it is not centrally controlled by any one player, Litan says.

Web 3.0 Activities

In terms of how much of the datasphere and cloud is tied to Web 3.0 activities -- it seems to still be very early days. For example, she says, cryptocurrency trades might not represent a lot of data, but once NFT commerce includes big objects, it can require distributed-style storage. Options for such storage include IPFS (InterPlanetary File System), Litan says, which is a peer-to-peer network data storage in a distributed system, as well as value-added systems such as Arweave, which make IPFS more reliable, secure, and persistent.

There are still some functional concerns that might hold developers or organizations back from leveraging distributed systems. “The reason why you’d want to use decentralized computing is if you’re setting up your own node or if you’re writing applications that need compute power,” Litan says.

Some benefits of turning to a decentralized cloud include it can be a way to cut costs, she says, rather than be at the whims of a centralized party that can increase rates, own the user’s data, and keep them locked in place. “It’s very hard to move workloads from one cloud provider to another,” Litan says. “It’s certainly a nice innovation.” Yet such innovation has been talked about for years, she says, with uncertain progress being made.

Decentralized Cloud

Basically, the value of decentralized cloud in its current form boils down to the circumstances and needs of the users. “If you’re setting up a mining node and need some cloud power, why would you want to pay AWS?” Litan asks. A decentralized cloud might be cheaper to run in such cases, she says, which appeals to miners who want cheap computing in order to make money on the margins.

At the moment, when many developers write applications, they look to the most readily available cloud service, Litan says, and then wind up deploying on the main blockchain where there is no control over where Ethereum or Bitcoin run. “It’s like saying, ‘Where’s the internet running?’”

There is some possibility for blockchain and decentralized cloud to gain more momentum down the road, but for now their impact on the entirety of cloud computing remains rather niche. “It may become more important as people start writing compute-intensive workloads and they want to keep the cost down,” Litan says. Decentralized cloud computing may also be useful for organizations running non-blockchain applications, she says. “Then they control their environments, where they deploy, and how much they spend. They’re in control of the whole stack.”

What to Read Next:

Fintech, Cloud, and Finding Ways to Bridge the Skills Gap

Where Developers Fit in the Metaverse and Crypto Landscape

Crypto and NFTs: A New Digital Footprint for Enterprises?

About the Author(s)

Joao-Pierre S. Ruth

Senior Editor

Joao-Pierre S. Ruth covers tech policy, including ethics, privacy, legislation, and risk; fintech; code strategy; and cloud & edge computing for InformationWeek. He has been a journalist for more than 25 years, reporting on business and technology first in New Jersey, then covering the New York tech startup community, and later as a freelancer for such outlets as TheStreet, Investopedia, and Street Fight. Follow him on Twitter: @jpruth.

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