Amazon Web Service Outage Affects Cryptocurrency Exchanges

Amazon Web Services (AWS) suffered an hour-long network failure in South Korea during the early mornings of November 22, which halted the services of major local cryptocurrency exchanges, ZDNet reported on November 22, 2018.

Server Failures Hit AWS’s Asian-Pacific Region

Some of the largest cryptocurrency exchanges in South Korea have been forced to go online after the servers they were hosted on suddenly experienced critical failure.

Amazon Web Services, one of the world’s widely used cloud services, was hit with major internal server failures that brought popular digital asset exchanges to a halt. According to The Next Web, Upbit and Coinone were forced to go offline, and several popular e-commerce hubs were also unreachable.

“Between 3:19 PM and 4:43 PM PST we experienced increased error rates in the [Asian-Pacific region]. The issue has been resolved and the service is operating normally,” AWS said in a statement on their website.

Amazon had also released maintenance details, saying that AWS reportedly underwent an emergency inspection of the problems that arose in its network within Asia, and found that the problems also affected South Korea.

AWS is widely used by South Korean firms due to its price-competitive services, with the country’s largest conglomerates, Samsung and Hyundai, using their services for overseas operations, ZDNet reported.

The Outage Shines a Light on the Problem of Server Centralization

Following the outage, Upbit issued several statements on their website apologizing for being unable to warn their users about the sudden downtime in advance. The exchange’s admins took extreme measures to ensure that users weren’t stiffed just as the platforms went dark, canceling a number of trades that were made shortly before the outage.

Coinone, the other major South Korean crypto exchange that was affected by the outage, announced that it would be going into maintenance mode in order to prevent further damage to its clients. Upbit managed to come back online within a few hours of the outage, trade, withdrawals, and deposits are still suspended on Coinone.

And while the short-lived outage managed to get resolved relatively quickly, it gave investors valuable insights into how fragile these systems can be. Despite the fact that the only cryptocurrency-related outages were exchanges, many have speculated that some of the world’s most popular public blockchains are being hosted by cloud computing services like AWS.

Back in July 2018, independent investigators pointed out that roughly half of the nodes powering the Bitcoin Cash blockchain were being hosted by Alibaba, AWS’s main rival. The reports managed to raise quite a few eyebrows despite being uncorroborated, shining a light on just how centralized these systems are.

The latest technical failure at Amazon Web Services serves as a stark reminder of how damaging this kind of centralization can be.

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