Coinbase and Robinhood were among several significant platforms affected by an Amazon Web Services (AWS) data center outage on Monday, highlighting the vulnerabilities of depending on centralized cloud providers for essential financial systems.
Coinbase, the third-largest centralized cryptocurrency exchange (CEX) by trading volume, experienced disruptions due to an AWS data center outage, which issued reports of “increased error rates and latencies” for various AWS Services in the Northern Virginia area.
The AWS disruption caused Coinbase’s mobile app to crash, with numerous users experiencing difficulties logging in, placing orders, and withdrawing funds. The Base app faced similar issues.
“We can confirm global services and features dependent on US-EAST-1 have also recovered. We are continuing to work towards full resolution and will provide updates as more information becomes available,” AWS noted in an update on Monday, approximately three hours after the outage was initially reported.
“We’re observing initial signs of recovery, with some users now able to access and utilize Coinbase services,” Coinbase stated in a Monday X post, adding that the “team is continuing to prioritize this issue.”
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While no other cryptocurrency exchanges reported issues, several users on the stock trading platform Robinhood also faced trading execution delays and Application Programming Interface (API) complications.
“Amazon down, Robinhood down, Reddit down, McDonald’s down, Fortnite down,” tweeted crypto trader Kushy in a Monday X post.
The crash occurs six months after a prior AWS outage affected trading services on at least eight crypto exchanges, including Binance, KuCoin, MEXC Coinstore, Gate.io, DeBank, Rabby Wallet, and Weex, as reported by Cointelegraph in April.
Amazon attributed “connectivity issues” as the cause of April’s outage, which had repercussions on at least 12 of its services.
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Amazon AWS outage underscores the necessity for decentralized cloud infrastructure
AWS delivers cloud infrastructure for centralized exchanges that accommodate high transaction volumes with minimal latency in trading orders. It is utilized by some of the largest exchanges, including Binance, Coinbase, BitMEX, Huobi, Crypto.com, and Kraken.
This recent outage has reignited discussions on the need to create decentralized alternatives that eliminate single points of failure.
Layer-1 blockchain Vanar Chain is developing blockchain-based cloud infrastructure aimed at reducing this dependency. Following the April AWS outage, Vanar launched Neutron, an AI-native blockchain layer providing data compression ratios of up to 500:1. The system enables users to store files entirely on-chain, free from third-party reliance, according to Vanar CEO Jawad Ashraf.
“This unlocks entirely new possibilities: from simply storing a file fully on-chain without relying on third parties, to querying and verifying the actual information inside the file,” Ashraf informed Cointelegraph.
The Internet Computer protocol serves as another blockchain-based alternative, providing decentralized computing, storage, and hosting across global nodes. Other Web3-related infrastructure providers include Filecoin for data storage, Akash Network for decentralized computing, and Render Network for GPU-based compute services.
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