Coinbase and Robinhood Go Dark Amid AWS Chaos
A widespread Amazon Web Services (AWS) outage on Monday caused a global internet disruption, knocking out major platforms including Coinbase and Robinhood for several hours.
Users were left locked out of their accounts, unable to buy, sell, or even view their balances, sparking frustration and panic across social media. Both crypto trading giants confirmed that their infrastructure relies heavily on AWS, Amazon’s cloud computing backbone - meaning when AWS goes down, so does much of the internet.
The outage was so widespread that it affected not only crypto exchanges but also airline systems, UK banking platforms, and even Snapchat, demonstrating just how dependent the digital world remains on Amazon’s servers.
Centralized Infrastructure Crashes Decentralized Dreams
For many in the crypto community, the outage served as a stark reminder of a painful irony - even the world’s largest “decentralized” finance companies still rely on centralized web infrastructure.
Coinbase’s Base network, the company’s Layer-2 blockchain built on Ethereum, was also partially non-functional during the AWS downtime, adding fuel to the criticism.
The event underscores how fragile “Web3” infrastructure still is when built atop centralized Web2 foundations - a challenge that continues to haunt even blockchain-native companies.
Coinbase Promises Resilience Measures
In response to the backlash, Coinbase announced it is “reorganizing services” to reduce reliance on single points of failure like AWS. While details remain scarce, insiders suggest the company may explore hybrid cloud models or distributed hosting systems to ensure uptime during future outages.
Robinhood, meanwhile, confirmed its systems were fully operational again about two hours after AWS restored functionality. Coinbase’s recovery took longer, though the company said services were “continuing to stabilize” later in the afternoon.
AWS issued a statement saying internal failures had been “fully mitigated,” though users continued to report sluggish performance as the company throttled some services during the recovery phase.
The Internet’s Single Point of Failure
The outage reignited a broader discussion across the tech industry: Is the internet too centralized?
WS currently controls roughly one-third of the global cloud infrastructure market, hosting everything from Fortune 500 websites to crypto startups. A disruption in its systems can ripple across finance, communication, and transportation, effectively halting large parts of modern life.
Crypto advocates have long argued that true decentralization - running nodes, apps, and protocols on peer-to-peer infrastructure - is the only way to achieve resilience. Monday’s outage added urgency to that vision.
A Wake-Up Call for Web3 Builders
While the AWS incident lasted only a few hours, its implications will likely linger much longer. For an industry that prides itself on trustless systems and uptime, depending on a centralized tech giant remains a serious vulnerability.
Experts say the outage could accelerate investment in decentralized infrastructure, including Ethereum-based cloud alternatives like Syndicate, Akash Network, and Filecoin, all of which aim to remove corporate choke points from the digital world.
As crypto grows increasingly mainstream, the outage serves as a wake-up call: even the decentralized revolution still runs on Amazon’s servers - for now.
