- Blockchain Trilemma is a problem of having three choices with the option of choosing any two.
- The term was popularized by the Ethereum co-founder Vitalik Buterin.
Blockchains have changed the whole digital ecosystem by creating a distributed digital database. It has changed our lives in various aspects. It advances and establishes cryptocurrencies application, financial banking systems and integrated food supply chains. Their decentralized nature is one of the key factors that have gained the attention of people.
However, as the technology is gaining popularity, problems are arising at the same time. Such a problem or complexity is the Blockchain Trilemma. Blockchain Trilemma is the ideology of having three choices but with the option of choosing any two. To know what it actually is, we have to focus on the three key factors or three choices namely, decentralization, scalability, and security. So, without further delay, let’s deep dive into the world of blockchains to know more about it.
Blockchain Trilemma – The complexity of blockchain systems
We all know that blockchains are designed in a way that they can only handle a limited number of transactions per second. As blockchain technology gets popular and widely-adopted, it becomes congested for the network to handle a large number of transactions. However, when the scalability increases, it weakens the decentralization or security.
This makes it difficult for blockchains to achieve optimal levels in all three properties simultaneously. This is called the blockchain trilemma. The term was popularized by Ethereum co-founder Vitalik Buterin. But to understand the blockchain trilemma, one has to be familiar with the three different elements responsible for it. :
Decentralization is based on what is called Web3. It does not involve any central authority or third party to take part in the blockchain network. Rather, it gives the right to each individual to take part and manage the network on its own.
Scalability is simply the ability of blockchains to handle a large number of transactions without getting congested or complex. It helps a large number of individuals to take part in blockchain networks.
Security describes the ability of a network to prevent bugs, attacks, or any unprecedented activity. It is directly connected with the number of nodes operating in a network. Higher the nodes, higher the security of the network.
Experts believe that if one element gets increased, then the two underlying elements get decreased and makes it difficult for blockchain to operate. For example, how can the scalability be increased without damaging security or decentralization, or both. However, new technologies are coming to cope up with the problem.
Solutions for Blockchain Trilemma
The problem of blockchain trilemma can’t be solved with the help of one solution. Rather, we can take into consideration different approaches that come with greater innovation and better results.
- The first approach is to implement the sharding in the whole network of blockchains. Sharding is the process of splitting blockchains into smaller segments or shards so that they can manage specific databases. It’s basically a Layer1 scalability upgrade, which creates a partition between beacon chains allowing them to operate easily.
- The second approach is to choose different consensus mechanisms. You know that blockchains work on Proof-of-Work (POW) mechanisms.Hence, it requires a lot of energy and time which makes the whole process more delayed and complex. Rather, then we can use the Proof-of-Stake (POS) mechanism which is energy-efficient, simpler, and more accessible.
- The third approach is sidechain or parachains. Sidechains are basically layer2 solutions in which another chain is connected to the main chain in order to attain great speed and scale in the whole network.
Blockchain trilemma affects the whole functioning of the blockchain systems. However, the problem can be solved with modern solutions which have decentralization, security, and scalability altogether.