Stacks Pakistan
7 min readMay 25, 2021

Centralized vs Decentralized Networking: A Comparison

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Centralized vs. decentralized is indeed a hot topic for debate in today’s world. In the more orthodox times of computing and networking, this question did not exist, as there were no real options. When the globe, however, saw a vast rise of technologies like Blockchain, the decentralized network became a trending phenomenon in today’s business environments. With the availability of decentralization and an increase in the number of netizens, the “Centralized vs. decentralized network” debate appears to have gained more prominence. The following section would seek to explore some details about both networks and present the stark contrasts between these two.

History of Centralized Networks:

In the 1990s and early 2000s, anyone could post something online without relying on one specific company or service provider. Back then, the internet was fundamentally a standalone network. Consequently, this lead to decentralization, since the networks’ control was much limited.

However, with the drastic expansion of the internet’s demand and (hence) its provision, it soon became vivid that the decentralization which was being offered early on would, now, not be able to support the new, more huge set up. In order to mitigate this issue, virtual giants, such as Facebook and Google, intervened. Although their investments allowed for a more efficient internet even in more remote areas, it brought these companies in the centre of controversy. With these giants of the virtual universe possessing the internet users’ data, privacy concerns remain a big tension for the netizens.

What is centralized Network:

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Since they allow for the provision of more direct control and a simpler installing and managing procedure, numerous organizations continue deploying centralized processing architecture. Centralized networks are pivoted about a single “master” server, responsible for handling all major processing. This central owner accumulates the data and other user information. This user information maybe in the form of applications, user profiles, user-generated content, and user’s net history, etc.

Advantages of Centralized Network:

Centralized networking, although controversial in terms of data collection, does have its share of benefits:

1. Affordable

Centralized networks are somewhat affordable. How is it so? To know that we need to first know what a node is:

“A node, basically, is the redistribution point or communication endpoint in a telecommunication network.”

Now the development of these nodes requires financial input. Since centralized networks make use of limited amounts of nodes, hence it does not come with a hefty price tag.

3. Quick Decision Implementation

Since the centralized networks use client/server architecture where one or more client nodes are directly connected to a central server, a limited number of nodes are needed. Hence, if a centralized network decides to implement a change, it can be done in a matter of minutes.

Disadvantages of Centralized Network:

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

1. Trust Concerns

Despite many claims, the centralized organizations are not 100% secure and trustworthy. Although, a mutual agreement is set by the service provider claiming to provide security to user’s data, it can break easily..

2. Higher security and privacy risks for users:

There is a great risk regarding the abuse of the user data that the central network possesses. This very concern has, in the recent times, made centralized networks quite notorious amongst the netizens as some virtual giants have been accused of selling user data to third parties (the advertisers).

3. Prone to failures

Centralized networks or organizations offer limited scalability. Since all a single server powers the entire system, adding more storage, I/O bandwidth, or processing power to the server is the only way to scale your network. If not done, a lack of bandwidth is to occur. This lack of bandwidth could become a huge source of turbulence. Being unable to keep up with the influx of concurrent users, the centralized networks are prone to failure if someone has a business with fluctuating periods of activity. To deal with this, bandwidth has to be increases, which, obviously, comes with a price tag.

4. Could become inefficient:

Another disadvantage of the centralized networks is that if the master server crashes, the users’ requests remain pending. This could largely compromise the availability of system and cause a network depravity.

What is decentralized network:

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Just like its name suggests, decentralized networks or organizations are not centrally owned and administered by any single party. This system, instead, makes use of multiple parties acting as central owners. While there are different degrees of decentralization, the fundamental philosophy states the involvement of numerous independent machines that are consolidated and allow for the provision of a vast pool of resources. Although connected, each node within the network retains its independence in terms of control, and every one of them can set their own rules regarding data and workload availability.

Advantages of Decentralized Network:

There are multiple advantages of decentralization. The following section tend to list some:

1. Control

Decentralization has allowed users to take complete control over their transactions. To put it into simpler words, the netizens can (now) initiate transactions whenever they want to, without the need to authorize it from a centralized authority. Consequently, the decentralized networks took the verification process from the hands of the third parties and, instead, relied upon consensus methods to verify the information.

2. Data protection

Blockchain technology’s data structure is append-only. This renders the data stored in the blockchain system as unalterable or undeletable.

3. More secure

As mentioned formerly, the unique way of decentralized system conducting transactions, makes this system more resistant to data leakage. Decentralized networks make the use of cryptography in order to make sure that the data ledgers are secure. Also, the data in the current block requires data from the adjacent block in order to validate the data using cryptography.

4. Privacy

Decentralization can provide users with greater amount of privacy. In a centralized system, there are more chances that the information could be intercepted by a third party. However, the decentralized network is less prone to a breach in privacy, as there is no central authority that controls the data. For instance whilst using decentralization, peers can interact directly, without interference from any sort of a third party.

5. Open development

Open development is another advantage brought about by the blockchain technology. This means every user can develop wonderful tools, products, and services on top of decentralized networks. Juxtaposed to this, the centralized technology happens to be more often closed off with much fewer development opportunities. This also means that greater products and tools that are built, lead to more opportunities to build great businesses. The World Wide Web is a prime example of an open network, in which many great businesses such as Amazon, found opportunities to strive enormously due to the network effects of all the great things being built on top of the network.

6. More Efficient

Since individual users’ machines do not rely on any single master server to handle all processes, hence there is no single critical (vulnerable) point whose failure could jeopardize the entire system. Even if some party is extremely enthusiastic to bring the system down, they would have to intercept numerous independent systems, all one by one, with each of those having its own security controls and data. And if, by chance, a cyber attack did breach a single system, there is no guarantee that it would contain the valuable data the attackers are hoping to find and exploit.

Decentralized networks, also, have the tendency to be expanded much more easily, as simply more machines can be added in order to allow for more computing power.

Disadvantages of Decentralized Network:

Decentralization, although a more sophisticated technology, comes with its own share of disadvantages too

1. Cost:

Decentralized networks rely upon a greater number of nodes to transfer information from one place to another. Due to the setting up of a vast number of nodes, the installation of a decentralized network could prove to be a burden on an organization’s IT resources.

2. Coordination issues:

The master nodes (“A master node is a server on a decentralized network which is utilized to complete unique functions in ways ordinary nodes cannot”) in a decentralized network operate independently. Due to the presence of multiple master nodes, all acting independently, could lead to coordination issues as achieving and directing collective tasks might experience a time lag as some operations might get done before the other even if they were supposed to get done simultaneously.

3. Lack of awareness:

Being a relatively new technology, decentralized networking has not been implemented widely due to the lack of knowledge about this very technology. While industrial tech experts of the first world countries do have a good idea about it, those in developing countries know a lot less. Hence, this technology is not recognized as far and wide as its centralized counterpart.


Both centralized and decentralized systems come with a bouquet of advantages and disadvantages. The centralized system, however, has been garnishing more controversies recently. Decentralization is a trend that is on the rise. The truth, however, is that both the systems, be one more popular than the either, shall coexist for a long time in the future, as discarding either one seems like an impracticality.