In distributed systems, companies like Netflix opt for UUIDs over auto-incrementing IDs for scalability.Auto-increment IDs pose challenges in horizontally scaled, geo-redundant, and high-traffic systems.Issues with auto-increment IDs include collisions, poor mergeability, and predictability concerns.UUIDs provide globally unique IDs without central authority, with versions like v1, v4, and v5 for different use cases.Netflix employs a Snowflake-inspired ID generation system for unique, time-sortable IDs across instances.UUID v7, offering ordered generation and timestamp encoding, is gaining popularity for improved database performance.Using UUID v7 or Snowflake-style generators is recommended over v4 or auto-increment for new systems.Careful consideration of ID generation is crucial for scalable distributed systems to avoid performance pitfalls.Choosing timestamped, decentralized IDs benefits event-driven pipelines and global-scale platforms.Transition from UUID v4 to ULIDs can enhance performance in cases of random insertion patterns in large databases.