The incident exposed how much of the internet depends on just a few infrastructure companies.

What Happened During the Outage

At 11:20 UTC on November 18, Cloudflare’s network began experiencing widespread failures. The company, which handles about 20% of all internet traffic, suffered a complete breakdown of its core systems for nearly three hours.

The problem started with a database change at 11:05 UTC. Cloudflare was improving security on its ClickHouse database system when something went wrong. The database began creating duplicate entries in a configuration file used by Cloudflare’s bot protection system. This file grew from its normal size to more than double, breaking the software that processes internet traffic.

When Cloudflare’s servers tried to load this oversized file, they crashed. The file contained more than 200 features, exceeding the system’s built-in limit of 200 (normal usage was around 60 features). The failure spread across the company’s entire global network, affecting millions of websites that rely on Cloudflare for security, speed, and reliability.

Source: @Cloudflare

Users trying to visit affected websites saw “Error 500” messages instead of normal content. The outage lasted until 14:30 UTC when engineers manually replaced the broken file with a working version. Full service restoration was completed by 17:06 UTC.

Crypto Industry Hit Hard by Infrastructure Failure

Major cryptocurrency platforms suffered significant disruptions during the outage. Popular exchanges like Coinbase, Kraken, and BitMEX became inaccessible to users. Blockchain explorers including Etherscan and Arbiscan went offline, preventing traders from checking transaction details.

The timing was particularly bad for crypto markets. Bitcoin dropped to $89,300 during the outage, while Ethereum fell below $3,000. The total cryptocurrency market cap dropped 3% to $3.12 trillion.

DeFi protocols also struggled. Aave, a major lending platform, experienced service interruptions. Data provider DeFiLlama, which tracks DeFi statistics, went completely offline. Even basic tools like blockchain scanners stopped working.

The outage highlighted an uncomfortable truth about the crypto industry. Despite being built on decentralized technology, most crypto platforms still depend heavily on centralized internet services. When these services fail, even “decentralized” systems can become unusable.

Why This Outage Matters for Internet Resilience

The Cloudflare incident revealed how fragile modern internet infrastructure really is. Three companies – Cloudflare, Amazon Web Services, and Microsoft Azure – handle most of the world’s web traffic. When any one of them fails, large portions of the internet stop working.

This wasn’t the first major outage in recent months. Amazon Web Services suffered a similar failure in October 2025, affecting Coinbase and Robinhood. These repeated incidents show that internet infrastructure has become dangerously centralized.

Cloudflare operates data centers in 330 cities worldwide and connects directly to 13,000 networks. The company’s services include protection from cyber attacks, content delivery, and domain name resolution. When these systems failed, websites couldn’t determine where to send user requests or how to handle incoming traffic.

The outage also affected critical services beyond crypto and social media. McDonald’s ordering systems displayed error messages. Gaming platforms like League of Legends went offline. Many businesses and government websites experienced disruptions.

How Companies Can Protect Against Future Outages

Smart businesses are already taking steps to reduce their dependence on single infrastructure providers. The most effective strategy involves using multiple service providers instead of relying on just one company.

Multi-CDN approaches spread website traffic across different networks. If one provider fails, traffic automatically switches to backup systems. Companies can set up these failover systems to activate within minutes rather than hours.

DNS diversification represents another critical protection method. Instead of using one company for domain name resolution, businesses can split this function across multiple providers. This prevents websites from becoming completely unreachable when one provider experiences problems.

For cryptocurrency companies specifically, decentralized infrastructure offers the best long-term solution. Projects like Lava Network and Pocket Network distribute internet services across many independent operators. These systems cost more and perform less consistently, but they eliminate single points of failure.

Some crypto projects are moving toward fully decentralized infrastructure stacks. They run their own servers, use multiple internet providers, and avoid dependence on major cloud companies entirely. This approach requires more technical expertise but provides better protection against outages.

What Crypto Companies Should Do Now

The recent outages have accelerated interest in decentralized infrastructure among crypto companies. Industry experts recommend several specific actions:

First, crypto exchanges should implement multi-cloud strategies. Running critical systems across different cloud providers prevents total service loss when one provider fails. This approach costs more but ensures trading can continue during infrastructure problems.

Second, companies should invest in decentralized RPC networks. These systems distribute blockchain data requests across many independent nodes instead of relying on single providers. Projects like Ankr, Pocket Network, and Lava Network offer these services with built-in redundancy.

Third, crypto platforms need better monitoring systems. Companies should track their dependencies on external services and create backup plans for each critical component. Regular testing ensures these backup systems work when needed.

Finally, the industry should support development of truly decentralized infrastructure. Current Web3 systems still rely too heavily on traditional internet infrastructure. Building alternatives takes time and money, but recent outages prove this investment is necessary.

The Reality Check Web3 Needed

The Cloudflare outage delivered a harsh lesson about internet infrastructure. Even systems designed to be decentralized can fail when they depend on centralized services. For the crypto industry, this incident shows that true decentralization requires controlling the entire technology stack, not just the blockchain layer.

Companies that prepare for these inevitable failures will survive and thrive. Those that ignore infrastructure risks will continue suffering during the next major outage.