Cambridge research puts 31% of Ethereum node activity in the US, where a third offline can stall finalization

Nearly a third of Ethereum node activity is hosted in the United States, with roughly 39% across the European Union excluding the UK, according to research published Friday by the Cambridge Center for Alternative Finance.

The distribution is Western-centric without being concentrated in any single country, Alexander Neumuller, research lead at the center, told The Block's daily show The Starting Block.

The one-third problem

Nodes cluster around three hosting providers, Neumuller said, flagging Hetzner, AWS, and OVH. Hetzner's terms of service at one point barred running blockchain nodes, though Neumuller said that may have since changed.

Ethereum does not require half of its validators to fail to cause a live network disruption. Once more than a third go dark at once, checkpoints stop finalizing, he stated, citing the research.

He cautioned that the relationship between nodes and validators is not one-to-one either, and that no one knows precisely how many validators run behind any given node.

Why location is a legal question

Concentration carries jurisdictional weight.

In 2022, the U.S. Securities and Exchange Commission argued that it had jurisdiction over Ethereum because most nodes were hosted in the United States, meaning that transactions would fall under U.S. securities law.

Neumuller called the current distribution healthy, offering it as personal opinion rather than a finding, while flagging it as something the community should monitor.

"Geographical distribution is something desirable for a network," Neumuller said. Client software concentration presents a parallel risk, since a bug in a dominant client can propagate across the network.

The report includes distribution data for both consensus and execution clients.

The energy numbers, revisited

The report, titled "Ethereum After the Merge," reworks the methodology behind Cambridge's earlier estimates, incorporating empirical data on how nodes split between residential and commercial hosting rather than theoretical assumptions.

Network upgrades after the merge prompted the update, Neumuller said, since software changes can alter how hardware draws power.

Ethereum consumes about 7.9 gigawatt-hours annually, roughly one megawatt of continuous power, or about 2,000 UK households. That is a drop of about 99.98% against pre-merge levels. Sustainable power usage across the network now exceeds 56%, compared with a global average of 43%.

Offsetting Ethereum's total annual emissions with high-quality nature-based removal credits would cost between £25,000 and £55,000 (about $33,500 to $73,800), Neumuller said, comparing the figure to the price of a car. He named it the finding that surprised him most.

The Ethereum Foundation supported the work, Neumuller said, thanking the organization for enabling the new estimate. He has not discussed the centralization findings with the foundation directly and characterized its emphasis on decentralization as his own reading of its public communications rather than anything conveyed to him.