Yesterday’s (November 18) Cloudflare outage caused billions of dollars in losses as the internet appeared to be paralyzed. The disruption affected many users trying to access X, Truth Social, Reddit, ChatGPT, Coinbase, Ledger, BitMEX, DefiLlama and many others.
Ironically, many of the affected platforms and websites were related to crypto, an industry that favors decentralization. However, the outage of a single cloud hosting protocol in Cloudflare subsequently crippled the Internet, highlighting how much of the World Wide Web still is centralized.
Cloudflare (NET) stock price fell -1.09% on the day as investors began selling the stock amid the outage. It is currently trading at $194.76. However, NET stock is up +80.43% year to date, according to data from Yahoo Finance.
(SOURCE: Yahoo Finance)
Founder of AI-powered web browser calls centralization of platforms like Cloudflare a ‘systemic risk’
David Tomasian, founder and CEO of AI-powered web browser Curious, noted that relying on a small number of centralized cloud gateways poses a systemic risk. He said:
“Today’s Cloudflare outage revealed how dependent we are on a few centralized AI and cloud gateways. This is a systemic risk. The current AI and cloud stack is incredibly fragile, which can lead to disruptions to payroll, transactions, and business operations during an outage like this.”
Even though we treat AI as a utility, we nevertheless deploy it as a monolithic web service. With so much data concentrated on a small handful of external servers, a single point of failure can disrupt the entire world.
The answer is increased decentralization. Personal LLMs running locally remain available regardless of what happens on the public Internet. They don’t stop when an external service goes down. They do not create collateral damage throughout the economy.
Centralization cannot support the weight of an AI-driven world. Outages like this will only have greater consequences unless we can increase decentralization.
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Cloudflare is back online, but yesterday’s outage highlights vulnerabilities in the digital economy
watching my unstoppable, decentralized, censorship-resistant crypto web3 app get gutted because "Cloudflare has fallen" pic.twitter.com/XUEhUQZuLz
– Nader Dabit (@dabit3) November 18, 2025
While Cloudflare has since reported that everything is back up and running, yesterday’s outage is believed to have cost the global economy several billion dollars, with one report saying that for every hour Cloudflare was out, $15 billion was lost.
Whatever the number, it shows that when a single cloud provider experiences problems, the impact does not remain contained. This is becoming an avalanche, hurtling down and affecting many industries, hitting everything from social media platforms to e-commerce checkouts and back-end payment services, with crypto platforms also being heavily affected.
While crypto and blockchain platforms have heavily favored the decentralization narrative for some time now, many, if not all, still seem tied to centralized servers, such as Cloudflare and Amazon Web Services (AWS).
Last month, in October 2025, an incident involving AWS shut down services like Coinbase, Robinhood, MetaMask, Venmo, and non-crypto services like Snapchat and Reddit for several hours until the issue was resolved.
Cloudflare says the outage was caused by a “bot management functionality issue”
On November 18, Cloudflare experienced a service outage, triggered by an issue with a bot management feature, affecting multiple Cloudflare services. Here’s a detailed look at what happened.
– Cloudflare (@Cloudflare) November 18, 2025
Internet service provider Cloudflare says a failure in its bot detection system triggered an outage that resulted in the shutdown of around 20% of web pages, including several crypto platforms.
Cloudflare said in a post-mortem statement on Tuesday (Nov 18) that a “features file” used by its bot management system to combat cyberattacks had exceeded its standard limit, leading to a software outage.
“We are sorry for the impact on our customers and the Internet in general. Given the importance of Cloudflare in the Internet ecosystem, any outage of any of our systems is unacceptable.”
The root cause of the outage was an automatically generated configuration file to manage threat traffic. The file exceeded the expected entry size and triggered a crash of the software system that manages traffic for a number of Cloudflare’s services.
The company also said it initially suspected the incident was caused by a large-scale distributed denial of service (DDoS) attack, but confirmed there was no cyberattack or malicious activity. Cloudflare handles about 20% of Internet traffic and powers about a third of the web’s top 10,000 websites, applications and services.
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The article Centralization blamed for Cloudfare outage that caused billions of dollars in losses appeared first on 99Bitcoins.
