The blockchain trilemma refers to the design choices that each blockchain has to make. It’s about finding a balance between scalability, security and decentralization. Ideally, a blockchain is super scalable, secure and decentralized. In practice, you can’t have it all.
There is no solution or magic bullet to the blockchain trilemma (a term coined by Ethereum co-founder Vitalik Buterin). Just like with any engineering dilemma, trade-offs are part of the design process. Do you want to make a plane as fast as possible? Then you’ll have to limit the amount of cargo and people it can take. Do you want to make a vehicle tackle all terrains with ease? Then it won’t beat a Bugatti on a race circuit (if ever a nocoiner mutters: ‘Can Bitcoin only handle 7 transactions per second? Visa can do much more!’ then these kind analogies might help enlighten him or her: ‘Yes, but Visa is a centralized database with absolute censorship power’.)
At first, it may seem counterintuitive that a great invention in the digital realm (blockchain technology) would have problems scaling. In the normal course of affairs, as a technology becomes more popular, per unit it will become cheaper to mass produce and distribute. This is not the case for transactions on a blockchain. A blockchain that becomes very popular can clog, slow down and become too expensive.
But remember: blockspace is limited by design: it keeps the amount of data in check, which in turn makes it possible for a large number of participants to run a copy of the blockchain and thus keep the network decentralized. In other words, lower scalability is a trade-off for a high level of decentralization.
The Blockchain Trilemma
The Trilemma, as defined by Vitalik & Co. claims that blockchain systems can only have at most two of the following three properties:
- Decentralization (easy to run a node by many ordinary users)
- Scalability (large transaction volume)
- Security (secure against attackers with a lot of resources)
For example, if there are a large number of nodes, the network is secure, but then it has limited scalability because all nodes must validate the transactions.
To get a rough idea of how some blockchains deal with these trade-offs, let’s compare Bitcoin, Ethereum and Solana.
| Blockchain | Scalability | Security | Decentralization |
| Bitcoin | Low (7 TPS) | High | High (15.000 nodes) |
| Ethereum | Medium (25 TPS) | Medium/high | Medium (around 8000 nodes) |
| Solana | High (500 TPS) | Low (many outages) | Low (around 1500 nodes) |
A Dispute Over Scalability: The blocksize war
Scalability is the capacity of a blockchain to support high transactional throughput. So, why not do that and scale up? Why not enlarge the number of Megabytes available in each transaction block?
Glad you ask, you’re not the first. The so-called blocksize war that raged among Bitcoin developers, miners and node runners between 2015 and 2017 revolved around this question. The camp that was pro bigger blocks argued that it would allow Bitcoin to scale and have larger transaction throughput. The anti camp argued that the increased hardware requirements for such a ballooning blockchain would make it impossible for many ordinary people to run a node, thus compromising the decentralization of the Bitcoin network.
Decentralization
A decentralized…
Erik started as a freelance writer around the time Satoshi was brewing on the whitepaper.
As a crypto investor, he is class of 2020. More of a holder than a trader, but never shy to experiment with new protocols.
