Centralized computing systems have been commonplace for a long time. In a centralized system, many endpoints connect to one central point, which processes and connects them to each other. In recent years we have seen the rise of distributed computing, which is where there is no central hub, and each connection point interacts directly with each other, creating an interconnected network. For example, banks’ account ledgers operate on a centralized computing system, while bitcoin’s peer-to-peer ledger is a distributed computing system.
Centralized systems have several advantages and disadvantages: all of the information is in one place, and with powerful hardware you can process the information effectively. However, if the load is too heavy, or if there is a hardware issue, the central hub can go down, severing the connection to all the devices on the network. Think of what happens when a wifi network crashes or when there are too many connections and the wifi becomes slow. Centralized systems are also great targets for hackers — all of the information is in one place, and all that is needed for a major breach is to infiltrate a single point. Additionally, there can be incompatibility issues between one central system and other devices or add-ons, especially with proprietary systems.