Centralized Infrastructure Risk

Definition ∞ Centralized infrastructure risk refers to the potential for failure or compromise in a blockchain or digital asset system due to its reliance on single points of control or a limited number of entities. Such risks include censorship, data breaches, operational downtime, or manipulation by a central authority. This contradicts the decentralized ethos of many blockchain systems. A single point of failure could severely disrupt operations.
Context ∞ The situation regarding centralized infrastructure risk is a continuous discussion point within the crypto community, particularly concerning hybrid systems or services that bridge traditional finance with decentralized applications. A key debate involves balancing user convenience and scalability with true decentralization. Critical future developments aim to mitigate these risks through more robust decentralized alternatives and improved security protocols. News reports often highlight instances where centralized components lead to security incidents or service interruptions.