Centralized Web's vulnerability revealed as the need for decentralization intensifies

Cloudflare, which handles about a fifth of the world's internet activity, acknowledged on Tuesday that a database malfunction in its bot management system

that affected 20% of websites, impacting major crypto services such as , X, and ChatGPT. The disruption started at 11:20 UTC, resulting in numerous "500 internal server errors" across Cloudflare’s dashboard, API, and main network routes. The company to an "unusual surge in traffic." Although there were initial concerns about a possible distributed denial-of-service (DDOS) attack, later clarified that no harmful activity was detected .

This outage highlighted the weaknesses of centralized internet services, as crypto platforms like Arbiscan, DeFiLlama, and BitMEX also went offline

. Vitalik Buterin, Ethereum’s co-founder, for a move toward decentralization in a "Trustless Manifesto" released just hours before the incident, cautioning that depending on centralized providers such as Cloudflare or Amazon Web Services results in "single points of failure." The timing of the outage amplified concerns about the vulnerability of internet infrastructure, especially after a similar AWS failure last month .

The event also reignited discussions about the threat quantum computing poses to traditional cryptographic protections. While not directly related to the outage,

that Satoshi Nakamoto’s 1.1 million BTC—kept in older, exposed "pay-to-public-key" (P2PK) wallets—could be at risk from quantum attacks. Experts say these risks highlight the need for post-quantum cryptography, a shift that companies like Cloudflare have already begun .

Cloudflare’s investigation found that the outage was triggered by a "feature file" in its bot detection tool exceeding standard thresholds,

. The company stressed its dedication to fixing the problem but admitted the event exposed broader risks in the internet’s infrastructure. "Given Cloudflare’s role in the Internet ecosystem, any downtime is unacceptable," the company stated .

Financial markets responded quickly. Cloudflare’s stock (NET)

, adding to a 4% loss from the previous day as investor confidence faltered. This decline contrasted with the company’s otherwise strong 2025 performance, which had seen shares climb more than 80% since the start of the year . Meanwhile, crypto analyst Zhao pointed out that blockchain’s decentralized nature are less prone to the weaknesses of centralized service providers.

As recovery efforts proceed, the outage has intensified demands for decentralized web

. EthStorage, a company specializing in Ethereum-based web hosting, . Ultimately, this incident serves as a clear reminder of the ongoing challenge to balance scalability and security in today’s highly connected digital landscape.