Blockchain Trilemma


Originally coined by Vitalik Buterin, the creator of Ethereum, the blockchain trilemma is an issue that currently plagues all blockchains. To be precise, it is commonly considered that most blockchains can only provide two out of three of the following benefits: decentralisation, security, and scalability.

Decentralisation: To decrease the number of points of failure, decentralisation is vital; it allows for permissionless blockchains and the network to have equal opportunities for all, rather than a single controlling entity.

Security: A pillar of blockchain design is to have a strong security system, ensuring the network operates smoothly.

Scalability: Blockchains should be able to accommodate large transaction volumes while keeping transaction fees affordable and transaction speeds consistent.

There are many ways that blockchains find the perfect balance between these three benefits. Ethereum, for example, has Layer-2 scaling solutions that aim to overcome its scalability issues, along with changing its consensus mechanism during its Shanghai Upgrade.

Some consider the blockchain trilemma as something that can never be solved, with one benefit always sacrificed for the other two. However, there are also ambitious developers creating new projects that aim to find the perfect balance and solve the trilemma. 

Key Takeaway

The blockchain trilemma refers to a common problem that all networks currently face, where they can only optimally provide two out of the following three benefits: decentralisation, scalability, and security.

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