Trilemma of Blockchain

What is the Trilemma of Blockchain? How to Resolve it?

The perfect blockchain doesn’t exist. That’s why you see so many of them entering the business while claiming to address the issues. The Blockchain Trilemma states that a network can achieve at max 2 of the 3 ideal characteristics — decentralization, security, and scalability. This leaves an opportunity for hundreds of enterprises to fill the gaps and subsequently propel the overall growth of the blockchain industry. Likewise, the demand for enterprise blockchain development is at an all-time high.

As per Statista, the global blockchain market size will surpass USD 39B by 2025. For a technology that fought all speculations over the past decade, this is really big!

Now back to Trilemma, it is best understood by the CAP theorem.

What does the CAP Theorem Say?

Back in the late 1990s, the computer scientist Eric Brewer created something called the CAP Theorem with an intention to understand the biggest challenges faced by the industry.

His theorem argues that it is next to impossible for a distributed data store like a blockchain to simultaneously deliver on guarantees like consistency, availability, and partition tolerance. This is how the initials CAP got their name. Furthermore, the theorem posits that distributed data stores must thus give up on anyone guarantee in order to be able to deliver on the other two.

What Are the 3 Deciding Factors?

In our experience of enterprise blockchain development, we have learned that businesses lack education around ‘trilemma’. We too want to build that perfect blockchain but there’s more work in that direction. Here’s a quick run-through about the 3 factors that make up the perfect blockchain.

Decentralization

In blockchain, decentralization gives the power to a community of users to govern the network through their personal computing systems (nodes). This means, the blockchain should not have centralized decision-making authority and rely totally on the community of all the features, this is the most important. So a blockchain that is not decentralized is not a blockchain.

Security

No matter, decentralization coupled with smart contracting produces a highly secure network, it still doesn’t make them ‘impossible to hack’. For example, if an attacker is able to gain control of more than 51% of nodes then the chances of manipulation increase. Exactly why there’s been a transition from PoW to PoS. More the number of nodes, the greater the security.

Trilemma of blockchain

Scalability

Scalability in the blockchain is the same as in business — it refers to how much a network can grow in the future while maintaining the same sort of transaction speed and output.

Scalability and decentralization tag-teaming up tends to compromise security, while security restricts changes that allow the decentralized network to scale. Why? Well, basically because decentralized networks take a bit of work to operate and it makes scaling a little difficult.

How To Resolve This Complexity?

Here’s a Quick Run-Through of the most Popular Initiatives

Ethereum 2.0 — Sharding & Rollups

Sharding has become a popular solution to scale projects like Ethereum, which don’t rest on another network. Basically, when a network “shards”, it breaks the transactions that run on the blockchain up into easier sets of data that can be processed by the network quicker. This means more transactions can take place at the same time without congestion. Security is maintained because the different shards interact with each other and send information to the main blockchain so information isn’t compromised.

Rollups allow networks on Ethereum’s blockchain to “roll-up” multiple transactions into a single off-chain (with validated proof) and then submit the rolled-up data to the main chain. It’s kind of like carpooling. Rollups are clever because they reduce the data needed for a transaction, reducing traffic and enhancing speed.

The Lightning Network: State Channels

The lightning network works as a layer 2 solution as it is able to provide an additional security layer that presides over the main network. For example, let’s take Bitcoin which may ‘suffer from success’ but still struggles with problems like high costs and low transaction speed. The lightning network intends to solve these problems by offering users an avenue to transact without having to interact with Bitcoin’s main chain directly.

To solve this issue, you can set up a specific ‘channel’ to transact with people instead of making transactions on the main blockchain. These so-called channels are run by smart contracts that allow you to make transactions instantly, directly, and at a significantly less cost as compared to the main blockchain. You can make a state channel that records on the main blockchain which works like opening a new tab.

All transactions taking place are thus recorded off the main chain/channel till it is closed. After the channel is closed, all opening and closing info is eventually sent to the main blockchain. The security on these state channels is well taken care of as they operate through smart contracts.

Polkadot

Polkadot was created with the idea of creating a single blockchain solution that was interoperable and could thus collaborate with other blockchains at any given point. The backbone of a Polkadot network is a relay chain design that makes it a highly scalable network. This scalability is achieved by using different ‘parachains’ in the form of independent blockchains that finally meet the main relay chain. This only means that these chains have the ability to operate freely within their governance. This allows the network to scale and come together for added security.

Is It Really a Trilemma?

Let’s start by understanding that this ‘trilemma’ is only a model to illustrate and conceptualize different problems that are faced by blockchain technology. There isn’t any regulation saying that it is impossible to achieve these 3 aspects at the same time. Contrary to this, there have been a lot of expert teams who have worked on various approaches that could maximize security, scalability, and decentralization.

Experts at the CertiK Foundation strongly feel that the trilemma problem can be best depicted in the form of a pyramid where the fundamental base layer is security as it upholds everything else. Without the right security protocols, the scalability can be short-lived and the decentralization can corrupt anytime.

In this case, security lays out the groundwork for both scalability and decentralization to bloom. Scalability should always be iterative as it keeps improving over time and decentralization on the other hand is a time-consuming process. Because security can never be compromised upon, the CertiK Chain is built with secure software by trusted experts who prioritize security above everything else.

Solving the Blockchain Trilemma

Network security, decentralization, and scalability have been presenting a persistent trilemma to blockchain’s adoption across the industry; however, recent times have introduced some very effective solutions to connect these three corners with a single string while keeping the ecosystem trustless to the core.

Overriding a hugely accepted conventional CAP theorem, the implementation of Layer-1 and Layer-2 solutions along with Proof of Stake in the blockchain is giving birth to a new breed of decentralized platforms that never existed before and are at once distributed, secure, and scalable.

Blockchain Development with Antier Solutions

At Antier, we are building some interesting projects with a focus on getting as close as possible to addressing the trilemma. To know more about our projects, you can visit our website and follow this page.

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Antier Solutions

Antier Solutions

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Decentralizing the world since 2016 through full-stack custom blockchain solutions. Follow this space for DeFi, DAO, NFTs, Metaverse, Crypto Exchanges & more.