Centralized services are platforms or entities that operate under a single governing authority or point of control. These services rely on a central administrator to manage operations, maintain records, and enforce rules. This structure contrasts with decentralized systems where control is distributed across a network.
Context
In the cryptocurrency landscape, centralized services frequently include exchanges, custodians, and payment processors that offer user-friendly interfaces for interacting with digital assets. Discussions often revolve around the trade-offs between the convenience and accessibility these services provide versus the inherent risks associated with counterparty dependency and potential single points of failure. Regulatory scrutiny on these entities is a significant factor influencing market stability and user confidence.
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