Blockchain Trilemma - Crypto Academy / S5W2 - Homework post submitted to Prof @nane15

in hive-108451 •  2 months ago  (edited)


QUESTION 1: Explain in your own words what the Blockchain Trilemma is?

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The uniqueness of a blockchain network anchor on how decentralized, scalable and secured the network is in performance. These three attributes are the focal point of a developer’s consideration. Balancing the operation of these attributes have remained the goals of developers since the emergence of blockchain network, but most efforts have been futile. Hence, forcing developers to choose the important two characters and surrender one to achieve it. This occurrence during development of a blockchain network is called blockchain trilemma.

In a nutshell, the blockchain trilemma is an act of reducing the functionality of one feature in order to boost the performance of the two preferred feature. Enumerating further, a developer can choose to create a blockchain with high scaling efficiency by sacrificing decentralization. A highly decentralized blockchain have poor scaling efficiency and strong security. The three features are vital to blockchain functionality. This is why blockchain trilemma is regarded as a complex decision. Describing this occurrence using the word trilemma was introduced by Vitalik Butterin, the developer of Ethereum blockchain network.

His description is similar to the CAP theorem, an acronym for consistency, availability and partition, which was developed in the 1990s by Eric Brewer. In CAP theorem, it is believed that developing a network that will be consistent in data distribution, available and partition it is impossible.

Although it seems totally impossible, developers come up with new ideas that should be used to escape trilemma. However, this idea will be briefly discus in question 4.

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QUESTION 2: Is the Blockchain Trilemma really a trilemma?

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Blockchain Trilemma is a "little" trilemma because of the setbacks that it has displayed in some blockchains. A clear view can be seen on the scaling efficiency of Polkadot and Bitcoin. The developer of this two different blockchain reduce scaling efficiency and decentralization to achieve it two options.

Trilemma is not an issue to bother about since its solution is seen in some newly developed blockchain. Proof of stake, sharding, sidechain, channel etc are now used to wave a farewell to trilemma. Before another decade ends, trilemma will be overcome and each attribute will work simultaneously.

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Define the following concepts in your own words: A. Decentralization B. Scalability C. Blockchain security

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In a concise definition, this means an operation which lacks central power.
In blockchain technology, decentralization refers to the disbursements of data to several independent nodes. Decentralization is the attributes of blockchain network that brought digital currencies into existence. When a network is decentralizing, it data is not preserved on a single node but rather distribute to many which each of the node are autonomous in operation.

In financial institutions, decentralization have removed the power of authority that intermediaries used to exert on centralized network use and replace it with consensus mechanism (proof of stake and proof of work) and still maintain a trusty through encryption of it network which offer an immunity against cyber fraud. When a data is being created in a decentralized network, every node that connect to it have a duplicate. Attacking any node does not affect the network at all because of the duplicated data in other nodes.

A decentralized network is otherwise regarded as a permissionless network. The disadvantage of a decentralized network is that is lacks scaling efficiency but build up a strong security of itself. This is why blockchain developers usually sacrifice some extent of it. Lastly, a decentralized blockchain ledger is transparent (open-source).


Anything that lack security, lacks trust and this always reduce the number of users. This phenomenon marks the reason why a developer prefer to trade decentralization and scalability alone which a typical example can be seen on Proof of Work (PoW), a consensus mechanism that trades scaling efficiency but highly secured and decentralized and Proof of Stake (PoS) that reduces decentralization to have scaling efficiency and security.

Blockchain security is what make it reliable. The decentralized finance (DeFi) sectors have record less attack than centralized finance (CeFi). To attack a decentralized blockchain, 51% of the network is required. The cost of such operations make it a turnoff to hackers.

The blockchain security uses encryption to protect the entire ecosystem and keys (e.g. private key, memo key etc) to protect user's wallet.


Since traffic causes delay and may result in lost of interest, scalability remains another vital attributes of a blockchain network.

Scalability means the number of transactions that a blockchain can perform within a second. To actualize this attributes, developers opt for trading decentralization to scalability and security through implementation of Proof of Stake (PoS) consensus mechanism. In comparison, centralized blockchain network scaling efficiency is far greater than decentralized blockchain network.

Based on your knowledge, explain at least two viable solutions to the challenges posed by blockchain trilemma

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Every day, developers explore an avenue to create a solution for blockchain trilemma. Recently, the Ethereum blockchain upgraded to Ethereum 2.0 blockchain chain. This blockchain proves an optimistic amount of hope for blockchains trilemma. Not only that, the Algorand blockchain eliminated trilemma to get a rating of been the only blockchain that have completely solve trilemma. Algorand uses Pure Proof of Stake to solving blockchain trilemma. This method is completely anonymous as validators are secretly chose in random to validate a transaction without staking any token. This technique makes it difficult for an attacker to spot the next validator. Algorand breaks a record of been the fastest validation with a cheap gas fee.

Algorand method is currently regarded as a method that have solved blockchain trilemma issues completely.

The use of layers otherwise called Layer-1 and Layer-2 solution is used to solve it.
Layer-1method modifies the existing blockchain through the use of sharding, a state of splitting up blocks into shards. This allows nodes of the blockchain to certain amount of data instead of the entire data of the blockchain. Another Layer-1 solution is the use of Proof of Stake (PoS) consensus protocol, a method of selecting validator through their stake amount. Ethereum 2.0 blockchain network uses PoS consensus protocols to improve it scaling efficiency than Bitcoin.

Layer-2 method creates a subordinate network (subchain) to the blockchain (mainchain). This subordinate blockchain includes nested blockchain, a blockchain operates on top the main blockchain by receiving rules from it. This increases scaling efficiency by releasing load from the main blockchain. A typical example is the Bitcoin Lighting Network (BLN).

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Everybody dislikes restrictions, time-wasting and insecurity, that’s why a blockchain that an equilibrium in decentralization, scalability and security is not achieved tend to lose in values. The most preferable attribute is security, this is because participants will endure scaling efficiency but can’t withstand an iota lost of fund.

Blockchain trilemma is a complex decision that a developer have to think about during development of the network because the three attributes are vital.

Developers are gradually improving in the method of solving the complexity. All thanks to Algorand blockchain, Ethereum, Poldoka, Lightning network, EOS and Solana blockchain developers because they have build a blockchain that strike a balance in performance of the three attributes using Pure Proof of Stake (PPS) layers solution.

Since there are upgrades in various blockchains, a complete solution to trilemma will come in to existence soon.

Thanks for reading my weekly course
Much respect to you Prof. @nane15

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