The Web3 space is not free from Centralisation & our data is collected here as well!!

Surprise!! Surprise!! Your data is collected by entities even in the Web3 Space - Sucks!!

As a crypto enthusiast we need to understand how Blockchain whose original ethos is decentralisation in reality is quite centralised. In this article, I am going to delve into the use of centralised node infrastructure, actually introducing an element of centralisation to Blockchain.

As a user, we won’t be aware, but when we interact with the Ethereum Blockchain via Metamask, it’s quite centralised as Metamask makes use of Centralised node infrastructure providers like Infura to get needed Blockchain Data to process our transaction.

There was news recently as well about Metamask, Infura collecting user data like their IP address, wallet address etc.

Metamask collects user data of users who access Metamask using the wallet provider’s default node which is Infura, however, if users access Metamask using their own local node, their data is not collected.

Convenience scores over decentralisation and data ownership principles

However, many Web3 users are like me who may be crypto enthusiasts but are not developers or programmers having expertise in running their own node.

Also operation and maintenance of full node infrastructure is a costly affair, so people like me have no choice but to use Metamask through its default Infura node.(Shrugs, so my data is collected and stored by these companies. )

Understanding a major component of Blockchain infrastructure - Nodes

Let’s understand nodes more indepthly on how Blockchain companies using centralised nodes make the Web3 space centralised. It’s time to understand the basics.

Nodes are computer machines which have software enabling them to verify Blockchain transactions and broadcast them into the Network. In Blockchain, node infrastructure is the base as there is no server that keeps data, it’s a Network of nodes that verify data and store Blockchain data.

Validator nodes validate transactions and propose to create new blocks that will be added to the Blockchain once its verified by a quorum of other validator nodes.

The entire history of Blockchain transaction data is maintained by full nodes.

Full nodes have to verify past historic blocks again in a Blockchain like Ethereum, which is a resource intensive and time consuming process.

Requirement of connecting with full nodes to access Blockchain Data

Any developer or user accessing the Blockchain, needs to interact with a node to get needed Blockchain data. So, Dapp developers need access to full nodes.

As mentioned, Blockchain companies can maintain their own local node to access data, however, for reasons already highlighted many of them find it more convenient to take services of 3rd party node infrastructure providers like Infura, Alchemy.

Crypto Exchanges like Binance, major Blockchain explorers, Blockchain wallet providers; - Metamask, MyEtherWallet, MyCrypto, Jaxx and Exodus use services of 3rd party node providers like Infura to get required Blockchain data as they don’t maintain their own independent local node to get access to Blockchain.

Source
Web3's most popular wallet, Defi platforms, Web browser are using centralised node infrastructure to connect to Blockchain Networks.

3rd Party remote node making it possible to interact with Blockchain in Metamask

Here, entities connect to a remote 3rd party Blockchain node and trust the remote node with all the information it provides.

The remote 3rd party node serves as an RPC endpoint to entities accessing their services. RPC stands for “remote procedure calls”. A developer or user requests information to a node and through the RPC route the nodes fetch the needed Blockchain data.

Whenever we view our crypto balances in Metamask, a RPC request goes to the Infura node, which sends back our wallet balance information from the Ethereum blockchain.

Please read up more on this RPC concept because to be honest I am not very clear on it.

However, every dapp application has this RPC layer which requests it’s connected default remote node for Blockchain data. It’s actually some code communication between a dapp user accessing the Blockchain, or developer accessing Blockchain via nodes… shrugs

Use of Centralised node infrastructure is a major hurdle for decentralised functioning of Blockchain

The issue with 3rd party centralised nodes are, you trust that node fully with what data it gives.

Second, it’s happened several times that because Infura node experiences downtime, Dapps and crypto service platforms, validators using it’s services experience downtime as well. This results in a single point of failure collapsing operations of entities using that remote node.

Most importantly, we know Infura is collecting user data and storing it. So, user has no control over their data even in Web3 using services of such centralised nodes collecting user data.

Source
10 Blockchain Networks are supported by Infura node, meaning Dapps of other Networks other than Ethereum are using this Centralised node that collects user data.

Conclusion

I hope I was able to explain how Web3 space is centralised because of Blockchain entities(like Metamask) using services of 3rd party centralised node providers like Infura.
So, I won’t blame any crypto person opting to use VPN to safeguard their personal data.

I can’t express how helpless I am feeling in the Web3 space, understanding that even here I have no control over my personal data like my own crypto wallet address!!

However, the good news is that there is an alternative to using these Centralised nodes. I am talking about Light Clients. Light clients make it possible for everyone to access Blockchain Data in a decentralised way and users information is not collected here as well. I will come to this in another article.

Thank you for visiting, I hope you enjoyed my article!!