Centralized vs Decentralized vs Distributed network: What’s the Difference?

Whenever it comes to the word bitcoin or a blockchain, the word “Decentralization” always came through. But do you know the fact behind the word “Decentralization”? Well, I will explain to you the meaning of decentralization in simple words. So anyone can understand it, that what is decentralization and how it is correlated with the blockchain itself. That’s why I am going to compare centralized vs decentralized vs distributed networks.

One of the most important benefits of using the blockchain protocol is the decentralization itself. So, you will have to make sure to understand the advantages/disadvantages, on the top of the centralized and distributed systems as well, and we will compare it along with the explanations.

In this centralized vs decentralized vs distributed network guide, I will start by a little introduction about the importance of the different networks in blockchain, and I will explain, how it defers from each other.

Centralized vs Decentralized vs Distributed network: What’s the Difference?
Centralized vs Decentralized vs Distributed network

The Importance of Different Blockchain Networks

It is clear that overall more than 80% portion of the internet is built on top of the centralized network, but those systems have major disadvantages. This is what the decentralized and distributed system tries to assure you. Let’s have a brief on each type of blockchain system.

Discussions between centralized vs decentralized vs distributed systems are almost related to both individuals and organizations as well. Often, it affects every person, who is connected to the internet. It is somehow, the core part of the networks, firewalls, financial systems, startups, applications, web services, data storage facilities and more.

Often, all of these blockchain networks can work properly, while each one has a different quality over the others by the design, security, stability, and scalability. Sometimes the blockchain network can be a very small fraction of computers or a piece of code connecting a few devices. or sometimes it may span over countries and territories. Either way, all the systems face the same challenges in terms of maintenance costs, scalability and security.

In fact, the internet itself is a broad network. Eventually, it may bring all different networks together into a vast ecosystem. But the major problem is that not all organizations or individuals are not comfortable using these systems. They will have to select the best one among them, and we will help you to figure it out.

Centralized Network

In a centralized network, all machines are connected to the main central server (master or main net). It stores all data related to the users, user roles and other user information. The main network can handle large amounts of data such as user-generated content, user profiles, login/logout history on a single server. Often, centralized networks are easy to develop, and the setup process is quick and fast.

However, the centralized system has a limitation. All data has stored on the centric server, eventually, if the server crashes, the data no longer exists to the end-user. 

Even this type of system requires regular maintenance as well as the central server/master to connect all the users and devices together. The network feasibility depends on the main owner if the main system crashes everything will stop working. When it comes to security issues, It is the huge drawback of the centralized system.

Pros/Cons of Centralized Network


  • Easy setup and deployment
  • Development is quick and fast
  • Maintenance is easy
  • Centric server access


  • Prone to failures
  • High-security risks
  • Long latency (wait time) for users who are far away from the main server
  • Privacy issue for users

Decentralized Network

As the name indicates, the data stored in these systems are decentralized. In fact, it does not have one central server or an owner. It uses more than one computer as a central server. Each machine has a strong replica of the user’s data, which users can access from anywhere by connecting to the nodes.

However, the decentralized network is vulnerable to crashes the same as the centralized system. But, the design is more secure, thus it makes itself decentralized. In decentralized systems, when one or more nodes (central server) fails to serve the data to end-user, the other server can continue providing data as usual. This way, downtime is near to zero in such a network. 

A decentralized system by design provides faster access time to the data in its main net clusters. It is because the owners can create nodes in different areas where data demand is high. Thus, maintaining a decentralized system itself is usually more expensive.

Pros/Cons of Decentralized Network


  • Better performance
  • Allows to set up a more flexible system
  • Less failure chance than a centralized system


  • Maintenance cost is higher
  • Performance is not adequate, when not optimized properly
  • Security and privacy risks to users

Distributed Network

The distributed system is one step ahead of the decentralized one. Even it doesn’t have a single server, instead, it avoids the centralization. Users will have access to the data through the user privileges. Additionally, We can access/update/change those privileges to the users by doing some modifications in the system. The real-world example of the distributed system is the INTERNET itself.

The distributed system gives permissions to users to share ownership of data to other users. To improve the performance of the system, we can allocate hardware and software resources between users. Thus, the distributed system is safe against the failure of a single machine or a node. In a nutshell, distributed systems can improve the uptime of the node.

Because of the limitation of the other networks, distributed systems are evolving day-by-day. While using the distributed systems, the owner can increase the security for end-user, node or a network. Data storage is dynamic and privacy concerns are handled with ease. With the increasing performance of such networks, Distributed systems are the primary choice for many organizations.

Pros/Cons of Distributed Network


  • Fewer Security issues
  • Managed Transparency levels
  • Resources sharing
  • No scalability issues
  • Fault-tolerant
  • Improve performance
  • Fast network


  • Difficult to deploy

Centralized vs Decentralized vs Distributed Comparison

As you can compare, centralized vs decentralized vs distributed networks, there are huge advantages or a few drawbacks between every system. In the beginning, the networks have emerged with the help of centralized networks and were the only choice, until the decentralized network took place. 

So, providing more secure and faster access to data including less prone to failure, decentralized systems have provided significant improvement over the old networks. It is flexible and easy to set up, and it is in very much use today. 

In comparison to other networks, the distributed system allocates resources across the network and enables the user to share access rights and ownership as well. With such a great improvement in the system, it is more transparent and tolerant to faults. In regards to maintenance, a distributed system has lower maintenance costs. 

Ultimately, as you can see from above, all three setups have advantages and disadvantages. There is no definitive answer as to whether the first one is good than another one. This is because all three networks have qualities that you have to use based on your needs. Thus, select the best one which fits better with your business.

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About the Author: Mayur Patel

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