Nearly 20% of all the internet traffic on the planet is through Cloudflare's infrastructure and they are now going to be running an Ethereum Consensus Layer node by staking ETH.
It is a global network designed to make everything that connects to the Internet secure, private, fast, and reliable. It is the backbone of the web 2 infrastructure, along with Amazon's AWS.
If Cloudflare goes down, it takes over most of the web 2 ecosystem, including Discord, Shopify,Coinbase, Canva, SoundCloud, Robin Hood, Medium, Pinterest, and Dropbox, to name a few.
Since 2018, it has been web 3 friendly when it has integrated an InterPlanetary File System gateway into its infrastructure.
In the year 2019 it added an Ethereum Gateway through RPC nodes to allow users to interact with the Ethereum blockchain. This was part of their Distributed Web Gateway and showcased their adoption of web 3 tools for clients.
Cloudflare will be staking ether to participate in the Consensus Layer as it moves to proof of stake.
If you think Mining with GPUs will become a thing of the past, ETH will have to be staked to secure the network, and validators will use their ETH holdings to verify transactions and verify data on the network when it moves away from proof of work in the coming weeks, months, or years.
Cloudflare is trying to solve the scale and environmental challenges that face the use of the technology in the cloud, which is why the move comes at a time when new ways are being found. While it acknowledges that PoW is highly secure, it goes on to argue that
Many people share these views, but they miss the fact that electricity and waste are not irrevocably linked.
This is an extremely bullish sign for cryptocurrencies, and especially ether, aside from the Bitcoin maximalist who will be unhappy with Cloudflare's description of PoW. Cloudflare has also highlighted another option to PoW, which may have Chia bulls cheering.
Cloudflare has stated that it is only just beginning withEthereum and that it will not only be running nodes in the future. It ends its announcement with an encouraging note stating,
For web 3 to scale it needs partners such as Cloudflare to help create aspects of the infrastructure. Without some of the largest players involved in the process, reliance on centralized services does not project the desired image of a decentralized web.
It is not yet known how many nodes will be run by Cloudflare's experiment, but each validator must have 32 ETH staked to join the network.