centralised network

A centralised network is an architectural model where a single entity or a limited number of nodes control and manage network operations, with all data transmission, verification, and decision-making authority executed by centralised servers. In this structure, participants must interact through a central authoritative node responsible for storing user data, processing transaction requests, verifying identities, and maintaining system security. Traditional financial institutions, social media platforms, and cloud storage services adopt centralised network models due to their ability to provide efficient data management, rapid response times, and unified security standards. However, this architecture introduces single points of failure, data privacy concerns, and power concentration issues, driving blockchain technology to advance decentralised networks that achieve more equitable, transparent, and censorship-resistant system architectures.

Background: What is the origin of centralised network?

The concept of centralised networks originated from the client-server model in early computer science, proposed and widely implemented by Xerox PARC in the 1970s for constructing internet infrastructure. This architecture allows multiple client devices to connect to a central server through networks, with the server providing computing resources, data storage, and service distribution. As the internet underwent commercial development, centralised networks became the mainstream architecture, supporting e-commerce, online banking, email systems, and later social networking platforms. The financial industry has long relied on centralised networks, processing hundreds of millions of global transactions through systems like SWIFT, ACH networks, and central clearinghouses. However, the 2008 financial crisis exposed the vulnerabilities of centralised systems, prompting Satoshi Nakamoto to publish the Bitcoin whitepaper, marking the first application of decentralised networks in finance. Since then, the contrast between centralised and decentralised networks has become a core discussion topic in the blockchain industry, driving reconsideration of power distribution, data sovereignty, and system resilience.

Work Mechanism: How does centralised network work?

The core operation of centralised networks relies on layered architecture, typically including presentation layer, application layer, business logic layer, and data layer. Users initiate requests through client interfaces, which are distributed by load balancers to application servers that perform identity authentication, permission checks, and business logic processing, subsequently interacting with central databases to read or write data. Central servers use relational databases (such as MySQL, PostgreSQL) or NoSQL databases (such as MongoDB) to store user information, transaction records, and system configurations, ensuring data consistency through ACID transactions. To enhance performance, centralised networks deploy Content Delivery Networks (CDN) and caching layers (Redis, Memcached) to reduce database query pressure and accelerate response times. Security mechanisms include firewalls, intrusion detection systems, SSL/TLS encrypted transmission, and Role-Based Access Control (RBAC). System administrators possess supreme authority to modify data, freeze accounts, or reverse transactions, a power concentration model ensuring rapid decision-making and unified management but also raising trust issues. Backup and disaster recovery strategies are implemented through master-slave replication, off-site backups, and periodic snapshots, yet failures of the single central node can still cause entire system paralysis.

What are the risks and challenges of centralised network?

1. Single Point of Failure Risk: The greatest vulnerability of centralised networks lies in central servers becoming attack targets and system bottlenecks. Hardware failures, network interruptions, or DDoS attacks can render services completely unavailable, affecting millions of users. The 2021 Facebook global outage and 2022 Rogers network disruption in Canada exposed systemic risks of centralised infrastructure.

2. Data Privacy and Abuse Issues: Central entities controlling all user data may unauthorisedly use information for advertising, political manipulation, or sale to third parties. The Cambridge Analytica scandal revealed how centralised platforms exploited user data to influence electoral outcomes, triggering global attention to data sovereignty.

3. Censorship and Power Concentration: Operators of centralised networks can unilaterally freeze accounts, delete content, or restrict access, with such power sometimes used for political censorship or economic sanctions. Canada's 2022 freezing of bank accounts belonging to trucker protesters demonstrated potential risks of centralised financial systems.

4. Scalability and Cost Bottlenecks: As user scale grows, centralised networks require continuous investment in upgrading servers, bandwidth, and storage facilities, with this vertical scaling model being costly and having physical limits, while decentralised networks can more flexibly address growth demands through horizontal scaling.

5. Regulatory and Compliance Challenges: Centralised platforms must comply with different data protection regulations across countries (such as GDPR, CCPA), with cross-border data transfers facing legal conflicts, and regulatory authorities potentially requiring platforms to cooperate with enforcement actions, which may compromise user privacy rights.

Centralised networks, as the mainstream architecture of internet and financial infrastructure, have supported the rapid development of the global digital economy over the past decades, providing efficient, stable, and user-friendly service experiences. However, their inherent single points of failure, data privacy concerns, power concentration issues, and scalability bottlenecks have driven the industry to explore decentralised alternatives. Blockchain technology, through distributed ledgers, consensus mechanisms, and cryptographic verification, offers possibilities for achieving trustless peer-to-peer interactions. Although decentralised networks still face challenges in performance, user experience, and governance efficiency, hybrid architectures (combining centralised efficiency with decentralised resilience) are becoming the future development direction. For users, understanding the operational principles and potential risks of centralised networks helps make more informed decisions regarding privacy protection, asset security, and platform selection, promoting the construction of more equitable, transparent, and sustainable digital ecosystems.