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What are the different downsides of a decentralized network due to which people still prefer centralized network over decentralized network in some cases?

A decentralized network has significant advantage over centralized network and in general it is a genuine solution to the variety of issues and use cases. But in some limited cases, a person may choose a centralized service over decentralized service and that may be temporary priority for that particular use case.

As far as downsides are concerned, yes every system and technology has the pros and cons but how extended the pros are over the cons is more important and that decides the usability in a wide scale.

Here are some of the downsides of decentralized network:-

  • In a decentralized peer to peer network there is always a trade off between security, scalability and the extent of decentralization. In order to have a certain degree of scalability, the extent of decentralization is decided and this is one limitation to it. The best example is the consensus algorithm and the the extent of decentralization varies depending upon the type of consensus.
  • In a decentralized peer to peer network every node is capable to verify information but this process of verifying information holds good only in case of objective information. In case of subjective information, the individual nodes can not verify the information.
  • In a decentralized network like Blockchain, developers don’t want to directly take responsibility for governing the blockchain. They are the back-end developers of the decentralized server. They are engineers, not arbitrators, they don’t want the responsibility and they shouldn’t have it. So governance should be centralized around engineers which is otherwise against the spirit of decentralization. It is good to be decentralized, but some specific group of people can not dictate how the structure of decentralization would be. But in most of cases it is the case.
  • It is more tilted towards off-chain decision making.
  • A decentralized network like blockchain, is completely decentralized only if it implements on chain governance entirely. However, effective on chain governance is not possible because users cannot register their identity. Resulting votes are measured by wealth, which does not enhance network equality.
  • In practical life, decentralization is not beneficial to everyone. If decentralized applications want to have a broad user adoption, they have to define themselves according to current schemes in usability and trust establishment.