What is blockchain trilemma?

Untangling the trilemma for decentralized networks

Blockchain trilemma. Source: Ledger.com

Three pillars of blockchain technology

  • Decentralization. This concept is central to any blockchain, as it underlies immutability — no single entity has the power to manipulate transactions. As control over the transferred data is distributed across the network, all of its participants are equals.
  • Security. To prevent interference, blockchain networks must be equipped with ironclad defenses. Otherwise, transaction blocks may vanish, causing payments to disappear.
  • Scalability. The number of users and transactions is constantly growing. A blockchain’s ability (or inability) to support this rising demand can seal its fate. A lack of scalability results in delays and ramped-up fees.

Blockchain scalability

Rise in the number of Bitcoin wallet holders over the decade. Source: Statista
Efficiency of cryptocurrencies vs. Visa and PayPal. Source: Cryptonews.com

Pros and cons of scalability

Blockchain decentralization

Pros and cons of decentralization

Blockchain security

Pros and cons of security

Comparing PoS and PoW. Source: Documenting Ethereum Twitter account

Ethereum 2.0 as scalable and secure decentralized network

ETH 2.0 as solution to blockchain trilemma. Source: Medium.com

Lightning network — Bitcoin’s response to blockchain trilemma

How Algorand solved the blockchain trilemma

Algorand’s PPoS system. Source: Binance research

Blockchain trilemma and global adoption of blockchain networks



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