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"The blockchain trilemma" finding the balance between decentralization, security, and scalability

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by COINS NEWS 15 Views

What is the blockchain trilemma?

The blockchain trilemma states that at any given moment, a Layer 1 blockchain can only implement and maintain two out of three important properties, which are "decentralization", "security", and "scalability".

It is important to know that the trilemma is just a model to express the challenges that blockchain technology and developer face. There is no "law or rule" that states that these three aspects cannot be achieved all together. Various projects and teams have achieved or are currently working on different approaches to maximize decentralization, scalability and security.

Decentralization: A blockchain shouldn't be controlled by a single or few large entities. Decentralization is a core principle because it distributes power among various nodes, ensuring the network's resilience and resistance to central control.

Security: The degree to which a blockchain is resilient to attacks, unauthorized access and/or manipulation. A high level of security is crucial to maintain the integrity of a network.

Scalability: The network's capacity to handle an increasing number of transactions and maintain speed. The ability to process transactions efficiently and fast is essential for usability.

The trilemma implies that it's challenging to simultaneously achieve security, decentralization, and scalability. Improvements in one of these areas can sometimes come at the expense of the other two as you can see in the examples below.

Security over scalability

  • BTC (Bitcoin) has chosen for a highly secure consensus mechanism (PoW) that maximizes security, but at the expense of scalability. As a result, Bitcoin can only process a limited number of transactions per second.

Scalability over decentralization

  • BNB (Binance Smart Chain) is an example of a L1 that has focused on scalability with a more decentralized approach and a smaller number of validators. This has improved the network's scalability and speed, but reduced the degree of decentralization and security.

Finding the right balance between these properties is a challenge for developers, communities, investors and users. Making a concession leads to compromises.

A network that can solve this trilemma, AND is able to find adoption would have the potential to become the fastest, most efficient, secure and highly decentralized P2P monetary system.

submitted by /u/bvandepol
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