Blockchain Trilemma
What Is the Blockchain Trilemma
The blockchain trilemma, coined by Ethereum co-founder Vitalik Buterin, explains the difficulty of achieving decentralization, security, and scalability all at once in a blockchain network. Usually, a blockchain can excel in only two of these areas, compromising the third.
For example, highly decentralized networks like Bitcoin and Ethereum are very secure because they have thousands of nodes verifying transactions. However, this slows down processing and limits scalability. To speed up transactions, the network might need fewer nodes, which reduces decentralization. Increasing scalability by processing more data can lead to centralization and weaken security, making the network vulnerable to attacks. Strong security often needs complex and resource-heavy methods, which can reduce the number of participating nodes and thus, decentralization.
Developers and researchers have proposed solutions to tackle the trilemma by cutting-edge technologies like Zero-Knowledge Proofs (ZKPs). In a blockchain context, ZKPs allow transactions to be verified without revealing the underlying data, reducing the amount of information that needs to be processed and stored on-chain. This results in smaller transaction sizes (i.e., compressing the transactions into a proof) and lower computational overhead in the base chain, which increases scalability. Moreover, ZKPs uphold robust cryptographic security by validating transactions without revealing sensitive information. With significant advancements in modern ZKP technology, computational demands have been greatly reduced, allowing more nodes to participate in the network and further enhancing decentralization.