Cysic founder Leo Fan argued that blockchain tasks relying closely on hyperscalers like Google Cloud and Microsoft’s Azure danger undermining crypto’s decentralization ethos, at Consensus Hong Kong 2026.
Fan’s feedback got here after Cardano founder Charles Hoskinson outlined Midnight, Cardano’s privacy-focused challenge, and introduced partnerships with corporations together with Google and Telegram. Midnight is scheduled to launch its mainnet on the finish of March, in accordance with Hoskinson.
Hoskinson defended working with hyperscalers, arguing that no single layer-1 blockchain can deal with the computational calls for required for world, privacy-preserving programs.
“When folks spend a trillion {dollars} constructing knowledge facilities,” he stated, referring to main cloud suppliers, “we should always in all probability use what they spent the trillion {dollars} on as a substitute of making an attempt to construct a very totally different community.”
Midnight Basis CEO Fahmi Syed stated the community will debut with 10 federated nodes as a part of what he described as a “accountable” path towards decentralization. Google Cloud is amongst early collaborators offering infrastructure assist.
Justifying the one level of failure
Hoskinson stated Midnight is designed to dump heavy computational workloads, notably these tied to privateness and zero-knowledge cryptography, to cloud suppliers resembling Google Cloud and Microsoft Azure. He added that applied sciences like multi-party computation and confidential computing would permit suppliers to produce {hardware} capability with out accessing the underlying knowledge.
Throughout a stage demonstration, Hoskinson stated Midnight processed 1000’s of transactions per second with Microsoft Azure powering the backend compute layer.
Fan, nonetheless, argued that counting on hyperscalers for core compute nonetheless introduces structural centralization dangers.
“In case your validators look decentralized however all run on the identical knowledge middle in that’s nonetheless a single level of failure,” Fan advised CoinDesk. “Blockchain is meant to take away single factors of failure. If the infrastructure is centralized, that’s a contradiction.”
Cysic, operates a decentralized compute community centered on zero-knowledge proof era. He stated one buyer decreased proof-generation time from as a lot as 90 minutes on AWS to roughly quarter-hour utilizing Cysic’s distributed {hardware} community.
“In some situations, we are able to ship higher efficiency,” Fan stated. “We don’t must defeat them instantly, however we are able to compete.”
How decentralization needs to be outlined
Midnight just isn’t outsourcing its blockchain to Google or Microsoft. The bottom community runs its personal nodes, and Hoskinson emphasised that hyperscalers present {hardware} capability reasonably than governance or protocol management.
He described Midnight as a impartial coordination layer that might dynamically route workloads between cloud suppliers, arguing that encrypted computation and confidential computing environments guarantee suppliers “simply present the {hardware}.”
Fan’s critique focuses on a distinct layer of the stack.
Even when knowledge is encrypted and workloads can shift between suppliers, reliance on a small variety of world infrastructure operators concentrates energy on the compute layer, notably as demand for GPUs and knowledge middle capability intensifies, Fan stated.
The disagreement is much less about whether or not Midnight is centralized in a strict technical sense and extra about how decentralization needs to be outlined.
Hoskinson’s method prioritizes cryptographic neutrality over {hardware} possession. Fan stated that decentralization should lengthen to the compute layer itself.
Moderately than calling for a whole rejection of hyperscalers, Fan advocated a hybrid method.
“Use large distributors in a restricted method,” he stated. “Mix them with decentralized networks to make the system extra sturdy. Don’t quit decentralization as a result of that’s the character of our group.”
As blockchain networks pursue enterprise adoption and world scale, the divide between constructing parallel infrastructure and integrating with Massive Tech could outline crypto’s subsequent section.
