When Amazon Web Services went down this week, it took a big part of the crypto industry with it. The outage lasted only a few hours but it was enough to remind everyone how dependent the so-called decentralized world still is on centralized infrastructure.

The outage that froze half of crypto

The AWS disruption hit data centers in the United States, bringing down websites and apps across multiple industries. In crypto, the effects were immediate. Exchanges started lagging, DeFi dashboards failed to load, wallets showed empty balances, and node providers reported downtime. For a space that prides itself on independence from middlemen, it was a harsh reality check. The blockchains kept running as usual, but the services built on top of them could not function. The issue was not the networks themselves but the layers that connect users to them.

The hidden centralization nobody talks about

Despite all the talk about decentralization, most of the crypto ecosystem runs on the same few cloud providers. AWS, Google Cloud, and a handful of others host a large share of nodes, APIs, exchanges, and analytics platforms. Developers use them because they are fast, reliable, and easy to deploy. But that convenience comes with a cost. One problem in a single data center can interrupt millions of users across the world. In this case, a technical fault in an AWS region triggered errors from trading apps to blockchain explorers. It is the same story every time. Each outage exposes how concentrated the industry’s infrastructure really is, and every time the issue gets ignored once the lights come back on.

The decentralization myth

True decentralization means that no single company can stop the system from running. In practice, most crypto projects only apply that principle to the blockchain itself. Everything else, the websites, the APIs, the nodes, the analytics, the servers, is centralized. It is a contradiction the industry has lived with for years. The ledger may be distributed, but the access points are not. The result is a fragile ecosystem that depends on a few corporate giants to stay online. When those giants fail, the illusion collapses. Crypto is decentralized in theory but centralized in practice.

Why nobody fixes it

Building truly independent infrastructure is expensive and time-consuming. Hosting your own servers means higher costs, more staff, and more technical risk. Cloud services solve those problems until they don’t. Many startups in the space simply do not have the resources to maintain redundant systems across multiple providers. Others prefer to focus on user growth and features instead of backend resilience. As long as outages remain rare, most will continue to accept the tradeoff. The result is an industry that can run global financial systems but still depends on the uptime of one company’s server room.

What needs to happen next

If the goal is real decentralization, the infrastructure has to evolve. That means distributing workloads across several providers, creating fallback systems, and adopting decentralized cloud networks. Projects like Arweave, Filecoin, and Akash are working on these solutions but adoption is still low. Until that changes, every AWS failure will hit crypto like a mirror breaking the illusion it sells. The technology is revolutionary, but the foundation remains fragile. Crypto cannot call itself decentralized until it stands on its own infrastructure.