Cloudflare Outage Sends Shockwaves Through Crypto, Renewing Push for DePIN

Cloudflare experienced a major outage that cascaded into widespread service disruptions across thousands of websites and applications on Tuesday.

Several large centralized crypto services rely on Cloudflare to help with heavy traffic. BitMEX faced an outage while there was also significant downtime for Telegram-linked blockchain Toncoin. But the outage spread beyond crypto, with platforms like X or ChatGPT also going down, thus affecting millions of people.

This episode comes just weeks after Amazon Web Services (AWS) had an outage that took down access to major blockchains like Coinbase’s Base chain as well as Infura which powers a lot of blockchains.

Tuesday's outage reignited the conversation around needing to decentralize infrastructure to keep the internet running.

“Today’s Cloudflare outage shows how vulnerable the digital economy has become. When a single upstream provider experiences issues, the impact doesn’t stay contained; it cascades across industries, touching everything from social media platforms to e-commerce checkouts and backend payment services,” said Fadl Mantash, Chief Information Security Officer at Tribe payments, in an email to CoinDesk.

“Payments are particularly exposed. The infrastructure behind a single transaction relies on a chain of cloud platforms, processors, third-party APIs, authentication tools, and card schemes. When any link in that chain fails, the entire journey can break,” Mantash added.

Some in the crypto world have called for DePIN to be more widely adopted to combat such issues. DePIN, or Decentralized Physical Infrastructure Networks, uses blockchain incentives to coordinate and reward people for building and maintaining real-world infrastructure. This can be anything from wireless networks, to sensors, to energy systems, the purpose is to not rely on a central company. Users thus contribute hardware or services and earn tokens in return, creating an open, community-run infrastructure layer.

One of those leaders pushing that is the CEO of Gaimin, a DePIN project focused on distributing cloud infrastructure. Nökkvi Dan Ellidason said: “We must move to a truly distributed cloud model. By harnessing existing globally dispersed resources like underutilized PCs, Gaimin is building a network where capacity is spread across regions and continents, making it difficult for a single error to take down the whole global system.”

“This is the only way to safeguard the digital economy against the inevitable fragility of centralization,” Dan Ellidason added.

Read more: Cloudflare Global Outage Spreads to Crypto; Multiple Front Ends Down