A centralized network is basically any blockchain, platform, or service where a single entity or a very small group holds power over how the whole system runs. It is the opposite of the “decentralized dream” that Bitcoin and Ethereum were built on.
With a centralized network, one company or organization usually controls the nodes, validates transactions, upgrades the protocol, freezes accounts, or even reverses transactions if they want to.
Users don’t really get to vote with their nodes or their tokens. Instead, they just have to trust the people in charge. If the company changes their mind, your funds can be locked, your access cut off, or the rules quietly changed overnight. You deposit crypto, they hold the private keys, and you’re trading on their internal ledger. Your balance is just an IOU until you withdraw.
Classic examples of centralized exchanges are Binance, Coinbase, Kraken, Bybit, OKX, and, of course, most custodial wallets. Another example would be centralized stablecoins like USDT and early versions of USDC, where one company (Tether or Circle) decides how many tokens get minted, who gets blacklisted, and what reserves actually back the coin.
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Even some blockchains that look decentralized on the surface can lean heavily centralized. BNB Chain, Solana (especially in its early years), and many layer-2 rollups rely on a small set of validators, a single sequencer, or a multisig that a handful of insiders control. If that core group gets compromised, goes offline, or decides to censor, the network unfortunately suffers.
The trade-off is speed, low fees, a slick user experience, and easy customer support. So while centralized networks power most of everyday crypto trading and stablecoin usage today, they sit at the complete opposite end of the spectrum from truly trustless, censorship-resistant systems.