Centralized vs. Decentralized Digital Networks: Understanding The Differences

The terms centralized and decentralized have been widely used. You will find them in articles, press releases, LinkedIn posts, and everywhere. But when it comes to digital networks, what do they mean? And which one is better? In short, a centralized digital network is a network in which collective data is processed and stored by a single node.

Conversely, a decentralized digital network is a network in which multiple nodes store and process data.

There are advantages and disadvantages to centralized and decentralized networks, and choosing one will largely depend on your specific requirements. This blog will deliver the crucial differences between centralized and decentralized digital networks. 

What are centralized networks?

A centralized network is one in which all the nodes are connected to a single point. This single point is known as the central node, which controls all the communications within the network.

This type of network is very efficient regarding communication because all the data travels through the central node. This makes it easy to keep track of everything that’s going on and helps ensure that all the nodes are working together as a team.

But there are some drawbacks to using centralized networks. For one, if the central node fails, the whole network fails. And secondly, if someone manages to hack into the central node, they can access all the data passing through it.

How does a centralized network work?

Imagine you’re in a room with a lot of people, and in the middle of the room is a speaker. This speaker is the sole connection node to all the other people in the room and the only one they are meant to hear. That’s basically how a centralized network works. All the data is sent through the central server, and it’s the only way users can access information. This type of network is great for businesses because it allows them to control access to information and keep things organized and streamlined.

But, it also has some drawbacks. If the central server goes down, all the users are off the network. And if there’s a data breach, all of the user’s information is exposed. Ownership, in this case, is not subject to the individuals as authority and trust rely upon the central network authority.

What are decentralized networks?

So what are decentralized networks? To cut a long story short, they’re networks where no single point of control exists.

That’s in contrast to centralized networks, where a single entity (like Facebook, for example) controls the entire network. With decentralized networks, no central authority decides what content is allowed or who can join the network.

This is an important distinction because users on decentralized networks control their data. They’re not at the mercy of a central authority that can choose to delete their account or restrict their access to certain content or functioning.

How does a decentralized network work?

Imagine a world where the internet was completely decentralized. How would that work? Let’s understand it better with an example.

Let’s say you wanted to watch a movie. In a decentralized network, you would go to a website like any Torrent link per se and download the movie (we don’t promote torrent downloading). But instead of downloading it from one central server, you would be downloading it from several different servers worldwide. This property brings resilient nature to decentralized networks. If one server goes down, the movie is still available from another.

Decentralized networks are also censorship-proof. Governments can’t block access to specific websites because they cannot target one central server. This makes decentralized networks ideal for countries where the government tries to censor the internet.

Centralized Networks Vs Decentralized Networks

Basic differences 

Let’s start with the basics. 

  • The involvement of third parties

In a particular centralized network, a third party or a specific mediator is required to facilitate communication among the different nodes effectively. There is no need to have intermediaries  in a significant decentralized  network. Every individualistic node can communicate directly with other nodes on the blockchain network. 

  • Transparency

The centralized networks are comparatively less transparent as all information and data are effectively stored in one Central location. Decentralization significantly increases transparency through the DLT (distributed ledger technology).

  • Security

Traditional Centralized networks have more vulnerability to attacks as hackers can steal information and data by attacking the central storage of the system. Decentralized networks offer more security because even if one particular node is compromised, the other nodes are unaffected. 

  • Scalability

Conventional Centralized networks are relatively more uncomplicated to scale by effectively adding extra servers in the system. This is considered more challenging to pull off with decentralized networks as each of the respective nodes is required to be adequate for handling additional traffic. 

  • Exchange fees

Centralized networks tend to have high fees (consider financial service providers and banks) as more mediators are involved in this process. Centralized networks do not have these factors, resulting in lower fees. 

Key Differences

So, what’s the key difference between centralized and decentralized digital networks? In brief, it comes down to control.

  • With a centralized network, all the control is vested in a single point of authority. This can be great for security and maintaining consistency across the network. But it also means that any decision the central authority makes is final, and there’s no room for debate or dissent.
  • A decentralized network, on the other hand, distributes control among all the nodes in the network. This can lead to chaos and inconsistency, but it also means more opportunities for collaboration and creativity. Plus, the others can keep the network running if one node goes down.

Advantages of centralized and decentralized networks

Centralized networks

  • With a centralized network, all the data is stored in one place. 
  • It is easy to control and manage, and it’s great for security purposes. 
  • Less probability of network downtime due to a single central server functioning mechanism.

Decentralized networks

  • A decentralized network, on the other hand, is made up of multiple nodes that are all interconnected. 
  • This makes it more difficult to control and manage, but it provides greater redundancy and fault tolerance. 
  • Because there is no one point of failure, a decentralized network is more resistant to attacks.

Disadvantages of centralized and decentralized networks

Centralized networks

  • The biggest issue is that all your data is stored in one place, which makes it a prime target for hackers. If someone gets into the centralized server, they can access all your data, including your passwords and credit card information.
  • Another downside is that centralized networks are slower and less reliable than decentralized networks. This is because all the traffic has to go through the central server, which can get overloaded and cause connections to drop.

Decentralized networks 

  • Decentralized networks, on the other hand, have multiple servers that store data, so if one server goes down, the network still works. 
  • Hectic to solve or detect network issues as there’s no central point of failure.
  • Decentralized systems have more set-up and management costs since they require systems with the capabilities of automated functioning and communication. 

What to choose: Centralized or decentralized digital networks?

There are a few key differences between centralized and decentralized digital networks. Centralized networks are owned and operated by a single entity, while decentralized networks are spread out and owned by multiple entities. Decentralized networks are also more democratic, as decisions are made by consensus instead of by a single authority. Centralized networks are faster and more efficient than decentralized networks, but they are also more vulnerable to attack. Decentralized networks are slower but more secure, as they have comparatively fewer chances of getting compromised. What matters most, in the end, is whether you still place your trust in centralized authorities or if you prefer to assume control and accountability for your data yourself.

— Update: 13-03-2023 — us.suanoncolosence.com found an additional article Centralized vs. Decentralized vs. Distributed Networks (the History & Future) from the website www.liveaction.com for the keyword centralized vs decentralized internet.

Innovation Driven By ColdWar Anxiety

The original model for the internet was based on a centralized network for maximum efficiency and control. But once the ColdWar began, the Department Of Defense (DOD) got nervous about what a centralized network meant for cybersecurity. Network engineer Paul Baran created the concept of a decentralized network in a proposal for the US AirForce.

The idea was that if Russia delivered a cyberattack, but the equipment, devices, and switches were distributed around the network, the attack would not take down the entire network. Traffic could be delivered through alternate paths, and communications would not be crippled.

The BESM computer developed by the Soviets in the 1950s. Courtesy of Boris Malinovsky Image Source

Despite this early realization that decentralized networks could offer better redundancy, security, and improved network availability, the broader public felt that they specifically were unlikely to be at the receiving end of a Russian cyberattack.

The inconvenience of changing to a new network model was worth the risk of maintaining the status quo. Still, today the more familiar centralized model is the most widely used network on the internet. However, current trends and risk assessments along with an era of indiscriminate and monetized cyber-attacks are tipping the network popularity contest towards decentralized and distributed models.

This post examines why centralized networks have had a decades-long appeal to organizations and what factors and benefits are gaining momentum for decentralized and distributed network transitions.

Let’s first consider the architecture of a centralized network and its advantages.

Centralized Network

A centralized network is characterized by one centralized server or node receiving data requests from peripheral nodes and follows the traditional hub-and-spoke architecture. The central node or server node serves the peripheral nodes, sometimes called the client nodes. All transactions pass through a primary server. This server is the central point of connection between the peripheral nodes.

There are many reasons that organizations continue to use centralized networks. This type of network is not complex. It is easy to control and manage. This simplicity comes with several advantages.


This structure allows for the greatest control. It is more cost-efficient to centralize IT structures. Centralized networks make reporting, securing, monitoring, and management simple. With less complexity, it is easier to act in unison when making changes or updates. It can scale to an extent, but a single lead server’s capacity can only go so far.  This network model will work for small to mid-size organizations as long as they are not experiencing rapid workforce growth or using bandwidth-intensive applications.



Cybersecurity was not top of mind of organizations until recent years when it became apparent that hackers will target any organization of any size if a known vulnerability can be found on their network. This has realigned priorities for many enterprises who have to acknowledge that centralized networks are easier to hack and harder to recover.


Scalability is also a concern. Centralized network models do not scale well. Centralized networks struggle to aggregate and manage increasing volumes of data. Every request must go through a single central server. As the volume of requests increases, bottlenecks build up. With an exponential data increase in just the last few years, organizations are finding they have outgrown this model.

No Middle Ground

Additionally, when a failure does happen, it’s a complete outage. When the lead server fails, it brings down every connection in that network. This level of dependence on network connectivity is a significant business continuity risk.

Maintenance Pain

Maintenance of the server is also a headache. Any maintenance window is guaranteed downtime for the company and often results in delayed patches and updates – leaving networks vulnerable to attack and more willing to run end-of-life hardware rather than deal with the pain of replacing it.

At the Mercy of One Provider

Finally, a centralized network is more likely to rely on a single vendor and in a vendor lock-in situation which leaves the organization helpless to rate hikes, SLA failures, and other service issues.

Decentralized Networks

A Decentralized Network, also called a “Data Mesh” architecture, distributes the control and switching equipment throughout the network to various peer connection points. Each chosen connection point has a separate server that manages the data and information storage for that cluster of nodes.



Decentralized Networks have greater resilience. Any connection point can act as a backup server for another, creating fail-safes and redundancy throughout the organization. Each connection point is responsible for its information processing. If one node is hacked, it does not bring down the entire system because only that connection point is compromised.


Agility is also a hallmark of Decentralized networks. Because the architecture is not concentrated, workloads and shared resources can be distributed over multiple computer nodes instead of just one.

Instead of traveling to a central node to complete a task, data can be sent locally, creating faster accessibility. Other benefits of a decentralized network include faster MTTR. With localized troubleshooting, there is less network to wade through before finding the root cause of an issue.

Decisions can be reached sooner on the procurement and approval side because contract revisions and change considerations are more limited in scope. This opens the door for greater customization of processes and applications that make sense for each location. Organizations can take advantage of new technology more quickly and test its efficacy through individual nodes instead of waiting in a backlogged queue of approvals and hoping for the best. This model is not bound by capacity constraints and is ideal for large enterprises and mid-size enterprises on a growth track.


The lack of vertical top-down visibility throughout the network can make scaling up or global changes challenging to pull off in unison. It can also be hard to gain oversight and the analytics needed to meet compliance requirements and measure performance.

Distributed Networks

Distributed networks can refer to both location and architecture. Geographically distributed networks are what you see in digital-first companies, with employees who work remotely across the entire organization. There is no question that geographically distributed networks are increasing.

Architecturally distributed networks have a slightly different meaning. These structures distribute control equally across each node. This is different from decentralized networks with clusters of varying connection points throughout the network.


Each node is independent and can act as a backup for the other.  If a part of the network goes down, the protocol can be redirected through different routes. Like Decentralized networks, distributed networks offer more security, stability, and scalability than centralized networks. Still, unlike decentralized networks that use clusters of smaller “centralized” servers, the control is distributed evenly across each node.


There is no central router to manage IP addresses, so making any changes in unison can be challenging. It is more expensive and requires more equipment to have distributed power and control at each node. Centralized visibility is an issue making audits or compliance requirements a nightmare.

The Future

Since its inception, centralized networks have dominated the internet, but there is no question that the future is decentralized and distributed infrastructures. The modern enterprise cannot afford the risk of non-redundant network structures and the security vulnerability of having a single point of failure. The future network can manage the influx of data without congestion and stay up when a network issue occurs.  The secret to orchestrating these moving and multiplying pieces is enhanced network visibility.

About LiveAction

Image Source: researchgate.net

LiveAction offers the broadest network monitoring and management telemetry in the industry. Whether Centralized, Decentralized or Distributed, LiveAction can provide enhanced visualization for your network infrastructure from WAN edge to core to cloud.

Through LiveNX, LiveWire, and ThreatEyeNV, LiveAction delivers a complete suite of tools that assure your network availability, security, and speed optimization. Request a demo with one of our network experts today.

Want to learn more about the history of all things internet?

Check out our post that dips into the history AI Ethics or read about how network monitoring got its start.

— Update: 17-03-2023 — us.suanoncolosence.com found an additional article Your IT Organizational Structure: Should You Centralize or Decentralize? from the website www.softwareadvice.com for the keyword centralized vs decentralized internet.

There isn’t one answer to the question whether your organization’s IT structure should be centralized or decentralized. That’s because businesses rarely commit to one of these models. In reality, centralized and decentralized IT structures are two ends of a spectrum, and most organizations, including yours, are somewhere in the middle.

Understanding the benefits of both models will help determine the degree to which your organization should centralize or decentralize its IT structure. During the process, you should be planning for future growth and choosing software solutions that support your goals.

In this article, we’ll help you understand the benefits of centralized and decentralized IT structures and determine the best structure for your organization.

Centralized vs. decentralized IT organizational structures

In a centralized network, all users are connected to a central server that stores complete network data and user information. On the contrary, a decentralized network has several peer-to-peer user groups wherein each group has its separate server that stores data and information relevant to only that particular group.

Originally, all communications networks were centralized. The concept of a decentralized network was introduced by researcher Paul Baran in 1964 to help improve telecommunications infrastructure.

Centralized and decentralized network structures (Source)

During the Cold War, researchers were looking for an alternative to the traditional, centralized network structure. They feared that a single attack on the central server would render the entire system useless, even if most network lines and stations were undamaged.

Baran proposed “distributing” the critical switching and control equipment around the network. This way, if one part of the network was damaged, the undamaged sections would continue functioning. He suggested having a decentralized system by increasing network redundancy, i.e., adding additional devices, equipment, and communication mediums to ensure higher infrastructure availability during network failures.

Benefits of centralized IT structures

A centralized server monitoring the complete flow of network data works best for companies that need greater network control and visibility.

Centralized IT structure (Source)

There are many benefits of adopting this type of structure. A centralized IT network can:

1. Lower your hardware expenses. You can reduce hardware costs by keeping all servers and networking equipment in one place. When distributed across locations, extra or duplicate equipment is needed. In a nutshell, increasing redundancy increases costs.

2. Improve productivity for IT staff. A centralized structure gives your IT staff better oversight and makes routine tasks easier. For example, software installations, updates, and security patches can all be performed from one location. In decentralized IT setups, completing these tasks would require staff to manage each location separately, which can drive up costs and decrease productivity.

3. Increase your purchasing power. It’s easier to negotiate pricing of software licenses and support contracts for an entire company rather than for individual departments. This can result in better contract terms and even complimentary integration or support services.

4. Help meet industry regulations. Industry-specific regulations, such as HIPAA for healthcare providers and the Sarbanes-Oxley Act for financial services, require varying degrees of IT and database centralization, usually for data security reasons. Companies that store and process user information, such as credit card companies, tend to find it easier to meet legal data security requirements with centralized IT systems.

5. Improve the flow of information. Centralized IT structures help prevent data silos. Data and information can be easily shared across departments, leading to better knowledge sharing and collaboration. For example, using a centralized cloud-based CRM system will allow all employees to access customer information from anywhere.

Benefits of decentralized IT structures

Decentralization is a practical approach when different departments in a company have different IT needs and strategies. It allows each business unit to maintain a separate server and choose hardware and applications based on individual needs.

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Decentralized IT structure (Source)

Decentralized IT structures provide several benefits, including:

1. The ability to tailor IT selection and configuration. When individual departments have IT decision-making power, they can choose and configure IT resources as per their specific needs. The decision-making process is quick and doesn’t require a chain of approvals.

2. More fail-safes and organizational redundancy. Decentralization makes IT networks more resilient. As all departments maintain individual servers, one department’s server can function as a backup server for another department during network failure.

3. Faster response to new IT trends. As departments in decentralized organizations can make independent decisions, it’s easier for them to leverage new technology. Let’s say your customer service department wants to improve services using online live chat. In a decentralized model, it can do so independently. In a centralized model, there’d be many barriers to the purchase, beginning with getting buy-in from the IT department. Slow response to emerging technology trends can be a competitive disadvantage.

How to determine the right degree of centralization or decentralization for your company?

As discussed above, there are several reasons for moving toward or away from a centralized or decentralized IT structure. Of course, many factors will influence your decision, but there are also some general considerations that can help choose what’s best for your business.

Decentralized IT structures are typically best for companies that rely on technical agility to remain competitive.

Newer, smaller companies (e.g., startups) and organizations that need to respond quickly to new IT developments (e.g., software and hardware companies or app development firms) are most likely to benefit from decentralized IT networks.

Decentralized IT structures can be difficult to scale.

Organizations that organically develop decentralized IT structures—as a result of having no oversight in place—might have difficulty scaling. It’s hard and sometimes even impossible to bring disparate systems together without proper planning.

Centralized IT structures tend to offer more cost savings, especially for large organizations.

Centralization makes it possible for entire organizations to act in unison. All departments can migrate to new and cheaper technologies and negotiate contracts with more leverage.

Centralized network structures are highly dependent on network connectivity.

If the central server goes down, the entire network loses connectivity. And since there are no backup servers, chances are high that users will lose their data.

No matter which direction your department, agency, or corporation is headed, our team of software advisors can help you choose the right help desk and IT asset management software solutions to get there. Schedule an appointment to receive personalized recommendations from our advisors.

— Update: 19-03-2023 — us.suanoncolosence.com found an additional article Centralized vs. Decentralized: What Are the Core Differences? from the website 101blockchains.com for the keyword centralized vs decentralized internet.

Centralized vs. decentralized internet network is a debate that refuses to go away. In this article, we will explore both of these internet networks and understand their core differences.

Not so long ago, for a connection to go through, one had to know the connected computer’s telephone number. It is only after a dial-up that, one was to be able to establish a connection with other networks to access data of choice.

At the time, the organization was very chaotic and cumbersome; thus, its limitation to a subset of people. The fact that each computer was independent meant that the network was highly decentralized.

Currently, there are only a few web hosting and server companies tasked with the responsibility of providing internet connection, a development that has significantly eroded decentralization aspect of internet connection as been the case in the early years.

In 1998, for instance, a server that accounted for nearly 90% of all the pagers in the U.S stopped working, triggering one of the most significant internet connection shutdowns in the country History. Should such an incidence reoccur, the repercussion would be severe and felt far and wide.

Centralized vs. decentralized network debate seems to be more pronounced given that almost everything nowadays is dependent on internet connection. So, therefore, we will dive in to investigate the core differences of these two network types.

Centralized vs. Decentralized: The Definitions

What is a Centralized Internet?

There is a centralized point in a centralized Internet network, which can be a server through which all data in a network must pass through, before distribution to various computers or devices.

In the early days, the Internet operated as a standalone network that connected different groups of people and organizations. The fact that such networks’ control was limited to certain groups of people allowed for internet decentralization. That is no longer the case as demand for internet connection has ballooned to levels that earlier decentralized networks would struggle to offer support.

The earlier state whereby information passed through a central point, i.e., server, still exists. Unlike in the past, nowadays there are smaller networks inside bigger networks. The smaller networks can be groups of people or corporations working on unique data sets.

Please include attribution to 101blockchains.com with this graphic.    

The Evolution of Centralized Internet Connection

In the 1990s and early 2000s, one could post something online without having to rely on one specific company or service provider. While no one owns all the tools used to provide internet connections now, the fact that such resources are still the domain of few multinationals underscores the centralization aspect.

Google and Facebook own a good chunk of the resources that support internet connections, something that most people attribute to cases of privacy issues. It would be wrong to dispute the fact that such companies have invested a great deal in innovative ideas that have made it possible for people to connect to the Internet at high speeds regardless of location.

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However, consolidation of power and market share among a subset of companies has brought about a string of challenges that has fueled talk for a decentralized internet connection. The emergence of powerful Internet Service providers has made it harder for others to compete in the space something that people fear could have serious repercussion going forward.

Advantages of Centralized Network

There are undoubtedly multiple benefits or advantages of centralization. They are listed below.

  1. Defined Command Chain

The command chain is clearly defined in a centralized network. In this case, when a company used a centralized network, they know the chain of command. This means that all the employees within a company will know what they have to do and how much authority they have over certain elements.

All of these also mean that delegation is easy in the chain. Senior executives can easily delegate work to their subordinates and finalize and finish the work in the best possible way. If work is successfully completed, it creates a level of trust among the workers and chain, improving the confidence required to make it work.

When it comes to a network that utilizes centralization, one central node or a collection of nodes are responsible for transactional verification.

  1. Reduced Costs

One of the biggest advantages of centralization is the cost associated with it. Any centralized network or infrastructure requires less support and cost. As centralized organizations or networks are pre-planned, the costs associated with it do not cross budgets until and unless it is absolutely required to expand the network.

  1. Quick Decision Implementation

There is no doubt that centralization organizations or networks enable quick decision implementation. As centralized networks have fewer nodes or people, it requires less communication among the different levels of authorization.

Also, if a centralized network decides to implement a change, it can be done in a matter of minutes. For instance, a centralized network can put more stress on the KYC procedure and add more requirements. Let’s see the disadvantages of centralized systems in this decentralized vs. centralized guide.

Disadvantages of Centralized Network

There are also various disadvantages of centralization. Some of them are as below:

  1. Trust

Even though centralized organizations are secure and trustable, they are not 100% secure or trustable. The trust is an agreement that is set by the service provider and the user.

However, that’s an agreement, and it can break easily. Big corporations suffer from trust issues from their users, from time to time.

It happens when there is a lapse of security in the system, people tend to ignore the service for some time before the service provider mends the trust by offering solutions and remuneration to those affected.

  1. Security Issues

Centralization also means that the whole network is dependent on a single point of failure. Organizations know about the disadvantage and hence have deployed measures to contain it. However, the fact that there is a chance for failure is a big disadvantage for mission-critical services. So, it creates a massive security problem for the centralized network.

  1. Scalability Limitation

As a single server is used in most cases, it leads to scalability limitations.

What is Decentralized Internet Connection?

Centralized vs. decentralized systems connection standoff comes down to how people can access data online. Centralized internet networks come with servers that act as custodian of data and through which all data passes through.

On the other hand, decentralized internet connection relies on a peer-to-peer network built on a community of users whereby no one single entity is ever in control. In this case, various internet devices act as host of the Internet, rather than a group of powered servers.

Decentralized Internet, takes accessibility of data to another level as there are hundreds if not thousands of nodes through which one can gain access to, to access data.

However, the use of the blockchain-powered decentralized Internet could be the biggest leap in internet evolution, capable of putting to rest, the centralized vs. decentralized systems debate.

The debate of centralized network vs. decentralized network unfolds with decentralized blockchain network countering everything centralized system builds up.

When fully implemented, decentralized blockchain network would do away with centralized authorities that call the shots when it comes to connectivity online. Blockchain technology protocol has already proved to have the potential to meet the requirement as it allows transactions to occur across a distributed network without the need for an intermediary to oversee operations.

Anyhow, let’s check out the advantages and disadvantages of this network in this centralized network vs. decentralized network guide.

Advantages of Decentralized Network

There are multiple advantages of decentralization.

  1. Full Control

One of the most significant advantages of decentralization is that the users are in full control of their transactions.

This means that they can start a transaction when they want without the need to authorize it from a centralized authority, in simple terms that the verification process is not dependent on third-parties and a decentralized network utilizes consensus methods to verify the information. There are many decentralized organizations at work at the moment.

  1. Data Cannot Be Altered or Deleted

Blockchain technology’s data structure is append-only. This means that there is no chance for anyone to modify or alter the data once it is stored. Another blockchain technology utilizes different data models such as Corda, but they also follow the immutability property.

  1. Secure

Decentralized networks are secure because of how they handle data and transactions. They use cryptography to ensure that the data ledgers are secure. Also, the data in the current block require data from the adjacent block so that it can use cryptography to validate the data.

  1. Censorship

Decentralization also means less censorship. In a centralized system, there are more chances that information can be censored. However, the decentralized network is less prone to censorship, as there is no central authority that controls the data. Let’s take an example to understand the scenario.

In the case of decentralization, peers can interact directly, and hence there is no or less censorship.

  1. Open development

Another one of the benefits of blockchain-based networks is that these mostly support open development. This is because of its nature and how it operates. The network gets amazing services, tools, and products built on top of it by having an open development environment.

Linux, for example, is open-source and has an ecosystem that enables anyone to improve on it. The same is true for decentralized networks. In comparison, a centralized network or closed solutions do not get the chance to have open development. This limits development to a great extent.

Disadvantages of Decentralized Network

There are, of course, many disadvantages of blockchain networks. Some of the disadvantages include the following:

  1. Conflict: Decentralization can lead to conflict if it is not well maintained in an organizational structure
  2. Cost: In an organizational setting, decentralization can cost more than centralization as it requires setting up of systems that can make communication more automatic.
  3. Crime: When it comes to decentralized blockchain, then the crime can be one big disadvantage. As everything is done on the network is anonymous and can lead to misuse.
  4. Volatility: Decentralized cryptocurrency shows volatile behavior where the prices fluctuate a lot!

Centralized vs. Decentralized Network Comparison Table

Centralized Internet Networks Decentralized Internet Connection
Data Flow In Centralized Internet Networks data must flow through a Central point i.e. server Data flows through various point without any specific point where it must pass before access is granted
Data Communication Flow Data Communication flow is Vertical Data Flow is always open and Free
Decision Making Responsibility lies with the central point which can be one server There are multiple points that have decision-making capabilities
Adoption Mass Adoption Still in The Early Phases of Adoption
Privacy / Data Security Privacy is always an Issue as agencies and governments can track flow of information and data Known for data security as well as high levels of Privacy
Failure Subject To Effects of Single Point Failure A variety of access points or nodes through which data can pass, averts the risks of Single point failure
Authority Systematic reservation of Authority in a Network Network involves systematic dispersal of authority to various access points

Centralized vs. Decentralized Blockchain: The Core Differences

Tracking of Data

With a Centralized Internet connection, it is relatively easy to track how data flows from one place to another, given that such information goes through one place, i.e., servers. However, with decentralized Internet that is not possible given that thousands of devices act as nodes for storage of data. In this case, a person can access a given set of information from thousands of locations instead of one central point.

The fact that everything goes through a single point has allowed the likes of Facebook and Google to accrue a substantial amount of data that they use to their own advantage with total disregard to people’s privacy.

Privacy Protection

Unlike centralized networks, decentralized networks offer a certain degree of privacy that people have come to yearn for in the digital age. The fact that information passes through a variety of points makes it impossible for entities and governments to keep track of what people are doing online.

Decentralized networks are ideal for people who love to keep their privacy as well as protect their identity regardless of what they are doing online.

Single point Failure

Centralized internet connections are always at risk of single-point failure, given that data must pass through a given central point before dissemination. Depending on the backup system in place, failure of a server hosting huge troves of data could significantly make it impossible for people to access data at a given time.

Now that almost everything is dependent on the internet connection, a malfunction of servers, carrying important applications or data could wreak havoc on almost every corner of the world. Hack attacks of such installation have become a common phenomenon that has forced ISPs to spend billions of dollars to protect their networks.

However, with Decentralized internet connection failure of one access point would never make it impossible for people to access data in a network. The availability of thousands of nodes through which people can access information reduces the risk of people of being unable to access data regardless of the issue at hand.

Please include attribution to 101blockchains.com with this graphic.    

Limited Scalability

Limited scalability is another headwind that centralized networks contend with as all core applications are contained in single server machines. Addition of more storage as well as bandwidth and processing power must always come into play, to keep up with increased internet connection demand.

With Decentralized networks, the architecture allows the distribution of workloads over multiple computer nodes, instead of concentrating it in one place.

Data Censorship and Net Neutrality

Centralized internet connection has resulted in powerful companies to the disadvantage of end consumers. For instance, internet service providers can regulate internet speeds allowing them to regulate the kind of data and the speed at which people access information.

Internet service providers no longer treat all data the same. Commercialization essentially means those who pay more, enjoy a better connection with fewer restrictions, compared to those who pay less, a development that has brought about the net neutrality standoff.


In the case of centralized vs. decentralized government systems, you have to understand that centralized networks have governing authorities, but the decentralized network does not. So, the authorities will hold the most powers in the centralized system rather than the employees or the users.

On the other hand, in the decentralized system, there is no concept of authority. Thus, only the users in the system hold the most powers. As you can see in the debate of centralized vs. decentralized government systems, decentralized systems are much more unique in the feature. But that doesn’t mean that government authorities can’t use this technology. Blockchain is a similar decentralized network. In reality, there is a lot of blockchain for government projects thriving without any issues.

Bottom Line

Decentralized Internet faces some challenges that have stifled cryptocurrencies entry into the mainstream world. Both have the potential to revolutionize the way people live their lives in the near future. The face of stiff opposition and an unending list of hurdles to go mainstream.

Decentralized Internet, without a doubt, has the potential to address some of the deficiencies that have made centralized internet connection untenable. Right from addressing privacy issues to ensuring data security, decentralized internet connections stand a better chance of revolutionizing the Internet. Such connections would also benefit the end consumer and break the status quo when it comes to how companies handle data.

Centralized vs. decentralized internet network is a debate that won’t end anytime soon. So, if you want to learn more about them, you can check out our free blockchain course.

Excited to know more about blockchain? Enroll now for blockchain certifications and courses!

Source: https://www.blockchain-council.org/blockchain/centralized-vs-decentralized-digital-networks/

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