Here’s why the triad of security, scalability and decentralization is so hard to achieve.
One of the problems that the blockchain industry has been facing for a long time is the blockchain trilemma. The blockchain trilemma (also called the scalability trilemma) is the belief that decentralized platforms can only accomplish two out of the following three goals—security, scalability and decentralization—at a time.
The term was first coined by Ethereum founder Vitalik Buterin. He said that when developers are creating blockchains, they end up sacrificing one of the three goals to achieve the other two. This trilemma is so deeply entrenched into blockchain technology that even the top two cryptocurrencies by market capitalization, Bitcoin and Ethereum, have not been able to achieve all three goals. Let’s make sense of the blockchain trilemma by breaking down each of the three goals, the challenges they present and how the blockchain community is tackling them.
The three goals blockchains need to achieve
Decentralization
The main idea behind cryptocurrency was to facilitate transactions without a central authority, that is, to have a decentralized network. In the interest of decentralization, that information on public blockchains is stored on a wide network of nodes (computers of those using the blockchain) across different locations. This means that anyone can read and write on the blockchain. The presence of a large number of nodes makes it nearly impossible to attack a public blockchain since transactions can be traced back to individual nodes.
However, the presence of a lot of nodes (and consequently, a high number of users) also slows down the number of transactions per second processed on the blockchain.
Scalability
The slow speed of the public blockchain leads us to the second goal, scalability. To become more useful and practical on a large scale, blockchains need to be capable of processing a myriad of transactions quickly without charging a steep fee for them. Yet, public blockchains are not very scalable as of yet due to low transaction speed.
Continue reading: https://www.jumpstartmag.com/what-is-the-blockchain-trilemma/
One of the problems that the blockchain industry has been facing for a long time is the blockchain trilemma. The blockchain trilemma (also called the scalability trilemma) is the belief that decentralized platforms can only accomplish two out of the following three goals—security, scalability and decentralization—at a time.
The term was first coined by Ethereum founder Vitalik Buterin. He said that when developers are creating blockchains, they end up sacrificing one of the three goals to achieve the other two. This trilemma is so deeply entrenched into blockchain technology that even the top two cryptocurrencies by market capitalization, Bitcoin and Ethereum, have not been able to achieve all three goals. Let’s make sense of the blockchain trilemma by breaking down each of the three goals, the challenges they present and how the blockchain community is tackling them.
The three goals blockchains need to achieve
Decentralization
The main idea behind cryptocurrency was to facilitate transactions without a central authority, that is, to have a decentralized network. In the interest of decentralization, that information on public blockchains is stored on a wide network of nodes (computers of those using the blockchain) across different locations. This means that anyone can read and write on the blockchain. The presence of a large number of nodes makes it nearly impossible to attack a public blockchain since transactions can be traced back to individual nodes.
However, the presence of a lot of nodes (and consequently, a high number of users) also slows down the number of transactions per second processed on the blockchain.
Scalability
The slow speed of the public blockchain leads us to the second goal, scalability. To become more useful and practical on a large scale, blockchains need to be capable of processing a myriad of transactions quickly without charging a steep fee for them. Yet, public blockchains are not very scalable as of yet due to low transaction speed.
Continue reading: https://www.jumpstartmag.com/what-is-the-blockchain-trilemma/
