Cloudflare's global outage impacts the encryption industry, and the call for DePIN decentralization is rising again.

On November 18, 2025, the American cybersecurity service provider Cloudflare experienced a large-scale network failure that affected the globe, causing interruptions to thousands of websites and services, including Telegram-associated blockchain Toncoin, ChatGPT, and social media platform X.

The recent outage occurred a few weeks after a similar incident with Amazon AWS, reigniting the discussion about the necessity of adopting decentralized physical infrastructure networks (DePIN). Fadl Mantash, Chief Information Security Officer of Tribe Payments, pointed out that when a single upstream provider encounters problems, the impact is not limited but rather cascades across industries, affecting everything from social media platforms to e-commerce checkouts and backend payment services.

The Incident of Cloudflare Outage and Its Impact

On Tuesday local time, Cloudflare experienced a massive outage that impacted its global network. According to data from the network outage monitoring platform Downdetector.com, as of 6:41 AM Eastern Time, the X platform alone had received over 11,500 problem reports. Ironically, Cloudflare's own outage status page was also temporarily inaccessible, highlighting the vulnerabilities of centralized infrastructure.

The interruption had a direct impact on the cryptocurrency industry. A major cryptocurrency trading platform faced service interruptions, and the blockchain Toncoin associated with Telegram also experienced significant downtime. However, the impact of the interruption extends beyond the crypto field, as platforms like ChatGPT and X also faced outages, affecting millions of people. This incident occurred after a disruption at Amazon AWS a few weeks ago, which caused interruptions in access to major blockchains like Coinbase's Base chain and Infura, which supports many blockchains.

Cloudflare Outage Highlights Systemic Risks of Centralized Infrastructure

Tribe payments Chief Information Security Officer Fadl Mantash emphasized in an email to CoinDesk: “Today's Cloudflare outage shows how vulnerable the digital economy has become. When a single upstream provider encounters issues, the impact is not limited; it cascades across industries, touching everything from social media platforms to e-commerce checkout and backend payment services.”

He further added, “Payments are particularly exposed. The infrastructure behind a single transaction relies on a chain of cloud platforms, processors, third-party APIs, authentication tools, and card schemes. When any link in that chain fails, the entire journey may be interrupted.” This analysis reveals the interconnected dependencies in the modern digital ecosystem, where a few centralized participants have become critical single points of failure.

Cloudflare outage incident key impact

Impact scope: thousands of websites and applications around the world, including Toncoin, ChatGPT, X

Report issue: over 11,500 reports on the X platform

Industry impact: Crypto trading, social media, AI services, and payment systems are all severely disrupted.

Historical precedent: In July 2019, a vulnerability caused global website downtime for 30 minutes, and in June 2022, 19 data centers experienced failures.

Root cause: The cascading effect caused by single points of failure in centralized infrastructure.

DePIN Solutions and Decentralized Alternatives

Some people in the crypto world are calling for broader adoption of DePIN to address such issues. DePIN, or Decentralized Physical Infrastructure Network, uses blockchain incentives to coordinate and reward people for building and maintaining real-world infrastructure. This can be anything from wireless networks to sensors to energy systems, with the goal of not relying on centralized companies. Users thus contribute hardware or services and earn tokens in return, creating an open, community-operated infrastructure layer.

One of the leaders driving this initiative includes the CEO of Gaimin, a DePIN project focused on distributed cloud infrastructure. Nökkvi Dan Ellidason stated: “We must turn to a truly distributed cloud model. By leveraging existing global distributed resources, such as underutilized PCs, Gaimin is building a network with capacity spread across various regions and continents, making it difficult for a single failure to collapse the entire global system.”

He added, “This is the only way to protect the digital economy from the inherent vulnerabilities of centralization.” This view represents a growing movement aimed at building more resilient digital infrastructure that can withstand single points of failure.

Analysis of Cloudflare Outage History and Patterns

In fact, this is not the first time Cloudflare has experienced a large-scale outage; its systems have been compromised multiple times. In July 2019, a vulnerability in Cloudflare's software caused part of its network to exhaust the company's computing resources, leading to thousands of websites relying on its services being down for as long as 30 minutes. Notable platforms severely affected at the time included the blogging platform Medium, the gaming chat service Discord, the e-commerce platform Shopify, the music service SoundCloud, major CEXs, and the online storage service provider Dropbox.

In June 2022, Cloudflare experienced another outage that affected 19 data centers handling most of its global traffic, causing several mainstream websites and services to go down. This incident lasted for about an hour and a half. Such recurring disruptions reveal the fundamental weaknesses of centralized internet infrastructure, which even the most mature and technologically advanced companies cannot fully avoid.

How does the Cloudflare outage affect the cryptocurrency industry?

For the cryptocurrency industry, reliance on centralized infrastructure poses specific risks. Trading platforms, Blockchain nodes, and wallet services often depend on centralized cloud providers to host their services. When these providers experience disruptions, it can lead to transaction delays, asset inaccessibility, and even market manipulation. Furthermore, many Blockchain projects themselves rely on centralized service providers like Infura to interact with the Blockchain network, which somewhat contradicts the principles of decentralization.

The recent Cloudflare outage particularly exposed the vulnerabilities of crypto projects at the user access level. Even if the underlying Blockchain network continues to operate normally, users' inability to access the front-end interface and applications can severely limit the network's utility. For cryptocurrency projects seeking mainstream adoption, this reliability issue could become a significant obstacle, especially for financial applications, where service availability is crucial.

Current Status and Challenges of DePIN

Despite the promising alternatives offered by DePIN, the field still faces significant challenges. Current DePIN projects typically focus on specific verticals, such as decentralized storage, wireless networks, or computing resources. Building a comprehensive infrastructure network that can compete with centralized providers on performance, reliability, and cost will take time and substantial investment.

From a technical perspective, DePIN projects must address key issues including network consistency, data availability, and quality of service guarantees. From a business model perspective, they need to create sufficient incentives to attract network participants while maintaining cost competitiveness. Additionally, regulatory considerations are also important, especially in highly regulated industries such as telecommunications or energy.

Future Outlook and Industry Transformation

Recent outages from Cloudflare and AWS may accelerate the shift towards a more decentralized infrastructure model. As various aspects of the digital economy become increasingly important, tolerance for single points of failure is decreasing. This creates opportunities for DePIN projects to provide more resilient alternatives with competitive service levels.

In the short to medium term, we may see the development of hybrid approaches where projects combine centralized and decentralized infrastructures to achieve optimal trade-offs. For example, a project might use decentralized storage as a backup while maintaining centralized access to provide low-latency services. In the long run, technological advancements and increased adoption may make fully decentralized infrastructures the preferred choice for many applications.

As Cloudflare engineers rushed to fix the global outage, they may have inadvertently become the best salespeople for the decentralized revolution—each collapse of centralized services paves the way for the rise of DePIN. From the trading interruptions on BitMEX to the halting of the Telegram Blockchain, these inconveniences are turning into a collective awakening: in the digital age, the risk of relying on a single bridge is no less than having no bridge at all. When centralized infrastructure repeatedly proves its fragility, decentralization is no longer an option but a necessity.

FAQ

What impact did the Cloudflare outage have on the cryptocurrency industry?

The interruption of a certain centralized cryptocurrency trading platform and the significant downtime of the Toncoin Blockchain have exposed the vulnerabilities of the cryptocurrency industry’s reliance on centralized infrastructure, leading to transaction delays and asset access issues.

What is DePIN? How to prevent similar interruptions?

DePIN (Decentralized Physical Infrastructure Network) utilizes Blockchain to incentivize coordination of real-world infrastructure construction, avoiding single points of failure through a distributed node network and providing a more resilient alternative to centralized services.

Has Cloudflare experienced similar outages before?

Yes, in July 2019, a software vulnerability caused a global website outage for 30 minutes, impacting platforms such as Medium and Discord; in June 2022, a failure of 19 data centers led to service paralysis for about 1.5 hours.

What are the main risks of centralized infrastructure?

The issue of a single upstream provider can create cross-industry cascading effects, making payment systems particularly vulnerable. A single transaction relies on multiple links such as cloud platforms, processors, and APIs, and a failure in any of these links can lead to a complete system interruption.

What development challenges does DePIN face?

It is necessary to solve technical issues such as network consistency, data availability, and quality of service assurance, create sufficient incentives to attract participants, maintain cost competitiveness, and address regulatory requirements in specific verticals.