What is Blockchain Trilemma?
Last updated
Last updated
The Blockchain Trilemma refers to a widely held belief that decentralized networks can only provide two of three benefits at any given time with respect to DECENTRALIZATION, SECURITY, and SCALABILITY.
Decentralization illustrates how power is given to people across the world to govern, rather than having central control live with one person or party. In a blockchain, it describes mainly the number of nodes involved in block generation and transaction validation. The higher the number of nodes, the higher the degree of decentralization.
What is a node? How does it function in a blockchain? Please refer to the content: What is Node/Validator
Depending on the nature of the blockchain, if someone can secure control of more than half of the network (51%), they can alter a blockchain and manipulate transactions to steal from the network. Security generally describes the cost of taking control of a network, and it's often tied to consensus mechanisms. The higher the cost required, the higher the security of the blockchain.
How to control the majority of nodes? Please refer to the content: What is 51% Attack
Scalability refers to the blockchain's ability to support high transaction throughput and future growth. This means that as use cases and adoption accelerate, the performance of the blockchain won’t suffer. In general, the faster a blockchain can process transactions, the higher the scalability it is.
A centralized platform, such as VISA, has both scalability and a certain level of security. Decentralization, on the other hand, is basically the backbone of blockchain and cryptocurrency. This ensures that every user has open access to the transparent network.
But it also comes with a tricky drawback: because of the sheer weight of information processed to maintain the shared system, transaction speed can be slow, and the system is harder to scale. However, scalability is the main way for blockchain networks to reasonably compete with legacy, centralized platforms whose network settlement times and usability are, at this point, far superior.
In order to improve scalability, a portion of decentralization (e.g., by reducing the number of nodes), security (e.g., by changing the consensus mechanism), or even both, will inevitably need to be sacrificed. But that will be less of a barrier for attackers who want to take over the network.
These constitute the Blockchain Trilemma, where any blockchain must find a balance between DECENTRALIZATION, SECURITY, and SCALABILITY given the existing technology.
