Discussions about blockchain technology often refer to networks as “Decentralized”, “Distributed” and “Centralized”. But what is a Decentralized network? Is it different from a distributed network? And what are the advantages of these network designs over centralized networks? Here are the details…
What is Central Network?
Centralized networks are built around a single central server/master node that handles all important data processing and stores data and user information accessible to other users. From there, client nodes can connect to the master server and send data requests instead of directly performing them. Most web services, including YouTube, a mobile app store, or your online banking account, are coordinated by a central network owner; this means that all data transactions on these networks require verification through a third party authority.
Centralized networks are currently the most widely used network type on the web. These networks are dependent on a central network owner to connect all other satellite users and devices; this means that there is only one point of failure that can be deliberately exploited by malicious actors.
Benefits
Simple, fast deployment: Since chains of command are clearly defined in centralized networks, authorization within the network is relatively simple and less cross chat is required at different authorization levels. It is also easy to add and remove client nodes from the network by creating or removing connections between the client node and the host server. However, this does not increase the computing power of the network.
Cost-effective maintenance: Centralized networks are often the most cost-effective options for small systems and require fewer resources for installation and maintenance. Also, when a network administrator needs to patch or update the network, only the central server needs to be updated. This reduces the time and overhead required to keep a network up to date.
Consistency: Given the top-down nature of centralized networks, it is easier to standardize interactions between host and client nodes. This can lead to a more consistent and fluid end-user experience. Also, because it is relatively easy to monitor and collect data across the network, unnecessary or deviant activities can be identified and removed based on the priorities and needs of the network.
Disadvantages
Increased risks of outage: Since central networks have a single point of failure, if the main server goes down, the entire network is likely to be shut down. Therefore, client nodes cannot send, receive, or process user requests on their own. Also, server maintenance may require temporary shutdown of the main server, possibly resulting in service interruptions and consequent user inconvenience/decreased reliability.
Higher security risks: Having a single point of failure also increases the likelihood of security breaches or disruptions from cybersecurity threats such as DDOS attacks, as there is only one target to compromise. Also, since there is only one central repository for user data, centralized networks will always involve inherent privacy risks. If a host server goes down or is taken offline, its data can be permanently lost.
Limited scalability: Centralized networks can be difficult to scale after a certain point because the only way to do this is to add more storage, bandwidth or processing power to the central server. Also, if the network experiences traffic spikes beyond what the network is designed to handle, information bottlenecks can occur with users further removed from the central server, with increased latency.
What is Decentralized Network?
In contrast, a decentralized network distributes computing workloads across multiple devices rather than relying on a single central server. Each of these individual devices serves as a mini central unit that interacts independently with other nodes. As a result, even if one of the main nodes goes down or is compromised, other servers can continue to provide data access to users and the public network will continue to operate with limited or zero disruption.
Decentralized networks are made possible by the latest technological advances that equip computers and other devices with significant amounts of processing power that can be synchronized and exploited for Distributed computing. However, it is important to note that while Decentralized networks differ significantly from centralized networks, Decentralized networks do not evenly distribute data storage and processing over the entire network and rely on multiple, albeit centralized, servers per network.
Benefits
Increased flexibility/scalability: Since Decentralized networks do not have a single point of failure, they can continue to operate even if a master node is compromised or shut down. Also, Decentralized networks are easy to scale because you can add more devices to the network to increase computing power, and network maintenance usually does not require a full network shutdown.
Faster performance: User requests are often completed faster when using a decentralized network because network administrators can create master nodes in high user activity regions rather than forward connections to a single central server.
Enhanced privacy: Decentralized networks provide a higher degree of user privacy, as information stored on the network is spread over multiple points rather than passing through a single point. This makes monitoring data streams over a network more difficult and eliminates the risks of having a single target for malicious actors to pursue.
Disadvantages
High maintenance costs: Decentralized networks are more fault tolerant than centralized networks. This makes these networks typically more costly and labor intensive to maintain. Because a decentralized network relies on multiple devices to support the system, this places a proportional load on an organization’s IT resources. As a result, Decentralized systems are generally not suitable for organizations that only need a small system because the cost/benefit ratio is not appropriate under these circumstances.
Coordination issues: Because main nodes in a decentralized network act independently and may not be able to communicate with each other, larger organizations may encounter coordination issues and have difficulty managing and performing collective tasks. While this is an intentional feature of Decentralized networks, it means that not all business models and organizational structures will necessarily benefit from using a decentralized network.
What is Distributed Network?
A Distributed network is similar to a Decentralized network in that it gives up a single centralized host in favor of multiple network owners. However, Distributed networks consist of equal, interconnected nodes; this means that data ownership and computational resources are shared equally across the entire network. The term “Distributed network” is sometimes used to describe a network that is only geographically Distributed but can follow a top-down node hierarchy model. In most cases though, the term refers to a network in which node locations and computational resources are evenly distributed.
Distributed networks do not have a central server or separate master node group, so the data processing overhead is crowdsourced across the network as all users are given equal access to data. Therefore, the decision-making process in a Distributed network typically involves individual nodes voting to move to a new state, and the final behavior of the system will depend on the aggregate results of the decisions each node votes on. The specific processes by which a distributed network votes and makes decisions depend on the network’s consensus mechanism. All forms of distributed decision making involve individual components of the network interacting with each other to achieve a common goal.
Due to their geographically dispersed nature, Distributed networks are extremely fault-tolerant and secure as a result. Its advantages and disadvantages closely mirror those of Decentralized networks, but on a larger scale.
Advantages
Extreme fault tolerance: In distributed networks, one node can fail independently without affecting the rest of the system, as the computational workload will be rebalanced among the remaining nodes. As a result, Distributed data systems are significantly more robust than other network architectures based on some kind of top-down node hierarchy.
Speed and scalability: Distributed networks are more scalable than both centralized and Decentralized networks. They generally exhibit lower latency due to the even distribution of network processing power and data.
Enhanced transparency: Because data in a distributed network is shared equally across the entire network, it is much more difficult to successfully modify, censor or destroy information on the network. As a result, Distributed networks are intrinsically more transparent than other systems, especially given the fact that they often use cryptography to secure their data.
Disadvantages
High maintenance costs: As with Decentralized networks, Distributed networks require more resources to maintain or reconfigure because any meaningful change requires updating each node. Also, because Distributed nodes have different latency and do not follow a common clock, network administrators cannot temporarily order commands or logs. As a result, it can be difficult to design and debug algorithms for a Distributed network.
Coordination Issues: In the absence of a node hierarchy, there are no parent nodes controlling the behavior of child nodes, and as a result there is no way to organize individual nodes in the system. Therefore, it can be difficult to make timely decisions or accomplish large-scale tasks. This Decentralized chain of command can be an insurmountable challenge for certain businesses and organizations. Also, since it is difficult for any node to obtain a global view of the entire network, it is more difficult for individual nodes to make well-informed decisions based on the state of other nodes in the system.
Blockchain Networks: A Reconfiguration
When discussing the relative benefits of different network architectures, it is important to keep in mind that no configuration is superior to another in all environments.
However, the modern internet is largely built on centralized networks, so most legacy systems include some form of centralized configuration. Currently, many innovations are taking place through the wider adoption of Decentralized and Distributed network structures, designed in many ways to address the limitations of legacy system architectures. For example, Decentralized and Distributed systems have the potential to realize previously theoretical applications such as Decentralized finance and the creation of self-sovereign identities.
As the range of network configuration options continues to expand, organizations will increasingly be able to choose the network architecture that best suits their specific needs, rather than trying to design around a limited set of network models. As a result, as alternative network architectures gain prevalence, the fabric of the digital world may shift towards something much more Decentralized and Distributed.
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