Centralized version control system stores all the file versions on a central server, and none of the developers have a complete copy of the files in the local system. So if the central server fails, all the project's data is lost.
However, in a distributed version control system, all developers have a copy of their system's code versions. Hence, this system removes the need for a single backup location, enables them to work offline, and ensures that there is no danger when the server crashes.