After covering all things blockchain for a few years, we’ve seen how the move toward Web3 is much more than the “magic” of digital money that many think on when they discuss cryptocurrencies. Web3 has the potential to solve the significant issues that plague the web and our world, regarding privacy, self-autonomy, and economics.
The infrastructure behind Web3 will be a service that helps Web3 apps and their underlying blockchains perform better with amplified capabilities, and which is going to be a foundational pillar of Web3. There are now over 1,000 blockchains. This requires massive infrastructure. And infrastructure makes or breaks new projects.
Inside Web3
We have previously written about Web3 and the pathway to get there from Web 1.0 that began in the 1990s.
Web3 websites continue to be hosted on traditional web servers. However, the users own and operate some parts of the project, unlike the corporate oligarchy inherent in Web2. Web3 websites directly connect to underlying blockchain networks to facilitate user ownership. Typical blockchains used for this purpose are Ethereum, Binance, Solana, and Fantom.
Let’s work through an example using a decentralized finance (Defi) website on the Fantom blockchain, SpiritSwap.
The SpiritSwap web application is hosted on a traditional Web2 server, which is running on Amazon Web Services(AWS). However, when a user wants to interact with SpiritSwap, they need to have a browser extension wallet, such as MetaMask, or a Coinbase Wallet, which connects to and authenticates their use of the web application.
These wallets can be thought of as a universal single sign-on tool. Rather than a user logging onto SpiritSwap with their username and password under SpiritSwap’s control, the wallet itself logs in. The wallet also contains all the user’s digital assets (cryptocurrencies and NFTs) while simultaneously acting as the digital identity, represented by a user’s hexadecimal address that starts with “0x.”
Once the wallet is connected, the user can exchange digital assets like a trader on the NYSE floor.
Behind the scenes (on the backend), the user’s wallet is connecting directly with an additional server running the blockchain’s application, or a node. This stores data about the blockchain and communicates with the other blockchain network nodes, including the validators that create blocks.
These application nodes use the same amount of electricity as a typical Web2 server. However, there is a need to access two servers: one running the web application and the other running the blockchain.
At this point, digital infrastructure providers become essential. They must devise efficient and innovative server solutions.
Web3 Demands Strong Infrastructure
Physical Servers
Although Web3 requires access to many servers, the Web3 movement is opposed to using the public cloud due to centralization concerns.
Various Web3 projects, such as Solana, have been renting and buying several thousand “bare metal” (physical) servers from a variety of players. The leasing of these servers attracted the attention of Equinix Metal, who hosted “Uncensored,” the Infrastructure Blockchain event, to promote best practices in this growing space.
Ankr’s Remote Procedure Call (RPC) service has served over 700 million monthly requests from Argentinian users, with similar numbers from Vietnam and Argentina. An RPC occurs when a computer program executes a procedure in a different address space, such as one a different computer in a shared network.
Hetzner has a competitive infrastructure hardware product available for German and Finnish clients through its AX101 and AX161 configurations. Unfortunately, most bare metal servers stocked by providers do not match the ideal specs needed for Web3.
Lower Redundancy
As peer-to-peer networks, blockchains are decentralized and distributed by their nature. This means that redundancy (backups) exists seamlessly within the network. If some physical hardware fails or a network outage happens, the blockchain itself remains virtually unharmed.
In a traditional enterprise environment, it’s not uncommon to have multiple power supplies with layers of hardware to ensure network redundancy.
Greater Disk Speed, Size, and Storage
We can imagine a blockchain like a growing stack of connected Lego bricks. The first brick is the “genesis block.” The stack will constantly grow from one side, and each block contains the group of transactions that form the distributed ledger. This is a huge amount of data that usually runs in LevelDB (an open-source NoSQL database), and it grows larger with every epoch (brief span of blockchain time).
Unfortunately, Ankr demonstrated that most network-attached storage options and virtualization technologies were insufficient to keep up with the needs.
This deficit means that most bare metal configurations using regular solid-state drives with less than 4TB of storage will not be sufficient for a high-traffic Web3 workload.
According to Ankr, 4TB of NVMe (non-volatile memory) solid-state storage is a minimum requirement. However, 8TB of NVMe per server for RPC nodes is preferable. In the case of archive nodes, which store entire copies of blockchains, between 12 and 30TB of NVMe per physical server is needed. Yet for some chains, even more is required.
Web3’s Node Types
| RPC Full Node | Archive Node | Validator Node |
| The most common node type. Used by developers/projects to connect and interact with a blockchain. Every use case for Web3/Defi/Metaverse needs access to other RPC full nodes. | Used by market research/analytics apps to track a blockchain’s activity. Requires a lot of fast storage, starting with 12TB of NVMe. | Validators create the next block. For this, they receive crypto rewards from the network.In proof-of-stake (PoS) blockchains like Ethereum 2, Binance’s Smart Chain, and Solana, validators replace miners (i.e., Bitcoin). Uses an enterprise-grade bare metal server or virtual server. |
Low Latency and Speed Are Critical
For most Ethereum-based chains, a typical RPC full node uses about 50mbps of bandwidth. This usage means that 30TB of data transfer per month and per server is sufficient.
In the last year, the Argentine peso fell 36% in value against the US dollar.
This has resulted in a switch from the peso to other currencies (many of them cryptos), and therefore 700 million RPC requests.
As DeFi supplements or even replaces traditional finance, connections to proximity nodes, and low latency (low delay) connections become critical parts of financial infrastructure. Blockchain gaming applications that adopt NFTs for in-game purchases and other transactions demand low latency for their applications.
Closing Thoughts
Web3 is the promising frontier of this decade. To be successful, digital infrastructure providers must offer new bare metal configurations which are quick and able to hold massive amounts of data while maintaining low latency.
Web3 demands a new breed of digital infrastructure providers maximizing the utility of bare metal configurations for faster, larger, and more efficient data processing. Web2 shall likely and finally yield to Web3, but only after the infrastructure is built, and that depends on the forward-looking innovators amongst us.
Disclaimer: The author of this text, Jean Chalopin, is a global business leader with a background encompassing banking, biotech, and entertainment. Mr. Chalopin is Chairman of Deltec International Group, www.deltecbank.com.
The co-author of this text, Robin Trehan, has a bachelor’s degree in economics, a master’s in international business and finance, and an MBA in electronic business. Mr. Trehan is a Senior VP at Deltec International Group, www.deltecbank.com.
The views, thoughts, and opinions expressed in this text are solely the views of the authors, and do not necessarily reflect those of Deltec International Group, its subsidiaries, and/or its employees.