Cysic founder Leo Fan argued that blockchain projects that rely heavily on hyperscalers like Google Cloud and Microsoft’s Azure risk undermining crypto’s decentralization ethos at Consensus Hong Kong 2026.
Fan’s comments came after Cardano founder Charles Hoskinson outlined Midnight, Cardano’s privacy-focused project, and announced partnerships with companies including Google and Telegram. Midnight is scheduled to launch its mainnet at the end of March, according to Hoskinson.
Hoskinson defended the work on hyperscalers, arguing that no single layer-1 blockchain can handle the computational demands required for global, privacy-preserving systems.
“When people spend a trillion dollars building data centers,” he said, referring to large cloud providers, “we should probably use what they spent trillions of dollars on instead of trying to build a completely different network.”
Midnight Foundation CEO Fahmi Syed said the network will debut with 10 federated nodes as part of what he described as a “responsible” path toward decentralization. Google Cloud is among the early partners providing infrastructure support.
Justify the single point of failure
Hoskinson said Midnight is designed to offload heavy computational workloads, particularly those tied to privacy and zero-knowledge cryptography, to cloud providers such as Google Cloud and Microsoft Azure. He added that technologies such as multi-party computing and confidential data processing would allow providers to provide hardware capabilities without accessing the underlying data.
During a stage demonstration, Hoskinson said Midnight processed thousands of transactions per second with Microsoft Azure powering the backend compute layer.
However, Fan argued that reliance on hyperscalers for core compute still introduces structural centralization risks.
“If your validators look decentralized but all run on the same data center, it’s still a single point of failure,” Fan told CoinDesk. “Blockchain is supposed to remove single points of failure. If the infrastructure is centralized, it’s a contradiction.”
Cysic, operates a decentralized computer network focused on zero-knowledge proof generation. He said one customer reduced proof generation time from as much as 90 minutes on AWS to about 15 minutes using Cysic’s distributed hardware network.
“In some scenarios, we can deliver better performance,” Fan said. “We don’t have to beat them right away, but we can compete.”
How decentralization should be defined
Midnight does not outsource its blockchain to Google or Microsoft. The underlying network runs its own nodes, and Hoskinson emphasized that hyperscalers provide hardware capability rather than management or protocol control.
He described Midnight as a neutral coordination layer that could dynamically route workloads between cloud providers, arguing that encrypted computation and confidential computing environments ensure that providers “just provide the hardware.”
The fans’ criticism focuses on another layer of the stack.
Although data is encrypted and workloads can shift between providers, reliance on a small number of global infrastructure operators concentrates power at the compute layer, especially as demand for GPUs and data center capacity intensifies, Fan said.
The disagreement is less about whether Midnight is centralized in the strict technical sense and more about how decentralization should be defined.
Hoskinson’s approach prioritizes cryptographic neutrality over hardware ownership. Fan said decentralization needs to be extended to the computing layer itself.
Instead of calling for a complete rejection of hyperscalers, Fan advocated a hybrid approach.
“Use large suppliers in a limited way,” he said. “Combine them with decentralized networks to make the system more robust. Don’t give up on decentralization because it’s the nature of our society.”
As blockchain networks pursue enterprise adoption and global scale, the divide between building parallel infrastructure and integrating with Big Tech may define crypto’s next phase.
