Understanding Blockchain Trilemma in Detail


Written by - Deepak Prasad

Blockchain revolves around three core fundamentals that have turned out to be elusive for every blockchain developer and enthusiast. Ethereum founder Vitalik Buterin coined blockchain trilemma. He opined that the triads of decentralisation, security, and scalability , which stand as the backbone of the blockchain network can never be achieved concurrently. This is a puzzle that looks like not going away anytime soon and has forced the majority of blockchain developers to embrace the impossibility and stick to the notion that it is mandatory to sacrifice one to achieve the other two:

  • Decentralised: the movement of decision-making and data management from a central government or entity to a more distributed network of owners to reduce vulnerability and enhance resource distributions.
  • Scalable: the blockchain fundamentals that enable the handling and processing of a high volume of transactions at once.
  • Secure: this refers to the ability of the blockchain network to be foolproof against any form of attack.

 

The elements of blockchain trilemma

Among the top features of blockchain technology, three solid and most important criteria (decentralisation, scalability, and security) form the spine of the revolutionary network. Every developer seeks to incorporate these three triads. Let us take a look at the main elements of blockchain trilemma:

 

Decentralisation

By virtue of our interaction with traditional banking and other financial systems whereby the users are not at the centre of the decision-making and hold control of their assets, data, and other personal documentation. The blockchain network enables autonomy and removes us from this archaic and restrictive model with the implementation of decentralised property.

Blockchain decentralisation is a mode of operation that imbibe permissionless ownership, giving users free rein and complete authority over their creativities and transactions without needing a gatekeeper. The decentralisation mantra is made possible with gracious oversight by a group of nodes that oversee transaction approval instead of the individual entity.

It is advantageous due to the blockchain consensus method of transaction approval with the unanimous decision of the validators and the fact that approved transactions can not be altered and are less prone to failure.

Blockchain network complete decentralisation comes with a high cost which is speed. Due to the several consensus confirmation processes and vetting, transactions require a longer completion time. This is the first of the trilemma trade-off that every developer needs to make peace with.

 

Security

As a revolutionary technology leading the charge of upscaling the existing system and infrastructure, it is ideal and essential to have an impenetrable security architecture that will be solid proof against all forms of security threats, such as cyber and hack attacks.

The susceptibility of blockchain technology has been on the upper trends right from its inception until now, with the spike in high-profile attacks such as Defi hacking, source code manipulation, cryptojacking, flash loans, and other attacks.

Blockchain network relies on an expertly vetted source code that must be adequately shielded against all form of security threat. The transparent nature of the source code has made it a prime target for hackers due to the infamous benefits of getting into these sets of codes.

Over the years, we have seen a surge in the success rate of attacks on blockchain projects, which points to the fact that many blockchain projects have dropped security at the expense of decentralisation and scalability. This is a tinkering decision because a more secure blockchain network requires enormous mining, consumes a lot of energy, and slows transaction speed.

 

Scalability

Scalability is the enabler of the much-revered blockchain's widespread adoption. This is the ability of the blockchain system to efficiently handle higher transactions per second without any glitches when the need arises. It can be put as the reliability of the blockchain network to function effectively in the face of a high load of transactions by tweaking its consensus protocol and some other blockchain system parameters.

In the utility sense, blockchain scalability has set a trend of what is achievable in handling a high volume of transactions within seconds. We have seen blockchain projects (Solana) that are capable of handling 50,000 transactions per second. That is a ridiculously high number compared to other payment processors like Visa, which does 24,000 transactions per second. This shows what scalability offers to blockchain developers that have pinned them into a corner with the enforcement of the trilemma that requires a mandatory trade-off between processing more transactions or maintaining enhanced security.

 

Blockchain projects approach to navigate trilemma

Various blockchain developers and development teams have tried to outwit the terrible choice of dropping one of the triads at the expense of the other two. This has resulted in the emergence of various innovative approaches geared toward fully integrating the three core components into their blockchain projects. We have seen approaches such as:

 

Ethereum's proof-of-stake model

In their effort to fight against blockchain trilemma. As of June 8, 2022, the Ethereum network has adopted a proof of stake consensus mechanism that mandates every miner or validator to stake a certain percentage of Ethereum which will stand as capital while serving as a form of collateral against any form of rogue and lazy behaviour. In addition, the introduction of side chains has dramatically reduced the number of loads on the Ethereum blockchain network, which has minimised energy consumption by mining activities and improved scalability.

 

Solana's proof of stake model

Solana's efforts to stem the effects of trilemma relies on the fusion of the innovative proof of history model with the enterprise-grade fast synchronisation proof of stake model. The Solana proof of history is a core component that validates that a transaction has occurred before at any point in time on the server. It works by hashing the output of one transaction as the principal anchorage of the next one. The proof of history model enhances scalability and boosts efficiency by reducing the workload on the primary protocol.

Implementing the Solana proof of stake comes with a stretchy requirement of staking a minimum of $10,000 before joining the validating team. This hampers the decentralisation drives since the quoted price is only affordable by some.

 

Cardano Ouboros secure blockchain network

Cardano is one of the leading sustainable blockchain protocols that implements a built-in security network named Ouroboros secure blockchain protocol. This model of side-stepping trilemma comes with the cost of a slower transaction processing speed.

 

Potential solutions to address the blockchain trilemma

The innovative advancement in the blockchain ecosystem has spiralled the emergence of various methods that work towards the quest for balance and usage of the three core components in the blockchain development drive at once. We have seen the emancipation of layers, relay chains, side chains, and all others, as stated below:

 

Layer 0 (Proof of work consensus)

Often you've come across the defunct proof of work consensus that has been switched to proof of stake that combats the imbalance caused by the blockchain trilemma. The importance of the proof of work consensus can not be overemphasized because this network is the fundamental layer that needs to be designed appropriately.

 

Layer 1 Scaling methods

These blockchain protocols do not require any additional network to process and complete transactions. This is modelled as a consensus mechanism that focuses on scalability which enables the blockchain network to work efficiently.

 

Sharding

This is one of the well-known layer one scaling methods that partition blockchain transactions into various servers, allowing validation of each data to be carried out simultaneously.

Ethereum, Zilliqa, Tezos, and Qtum have made a more concise effort toward fully adopting the sharding method of improving scalability and providing the much-needed balance among the three blockchain concepts.

 

Consensus protocol improvements

This is the wholesome upgrade from the slow proof of work consensus that's attributed to blockchain networks like bitcoin, which process seven transactions per second, to a faster and more efficient proof of stake and proof of history consensus.

The advancement of proof of work consensus increases blockchain network efficiency and enhances decentralisation and security.

 

Layer 2 solution

This can be regarded as a more advanced layer that ties any loose ends that might exist on layer 1. The sharding and consensus mechanism which forms the basis of layer one needs to fully align with the wholesome usage of the blockchain triads that various developers are searching for, this prompted the development of layer two with the hope that an improved layer would fully tackle the blockchain trilemma. Major blockchains like Polygon, Ethereum, Cardano, and others have adopted this solution that allows the usage of the three core pillars of the blockchain (decentralised, security, and scalability) for their optimum network performance, reduce blockchain network gas fee, and speed up transaction processing time,

 

State channels

This is a more advanced method of shedding the transaction load of the leading network. State channels remove the need for another side chain for the transaction processes by implementing a smart contract that allows user interactions without needing a validator.

 

Sidechain

A sidechain increases blockchain interoperability and transaction processing time by running parallel to the main chain. As a result, the main chain may concentrate on other issues, such as network security, performance, and transaction disputes. The operational process of this model defies every logic whatsoever with the way its two-way anchorage connects to the blockchain network and its centralised form of execution.

 

Nested blockchain

A nested blockchain means a blockchain within or atop another blockchain. This works as a parent-child connection whereby the main chain delegates blockchain transactions to its sub-chains while they process them and return them to the main chain for approval.

This was lauded as the most accessible and affordable way of achieving the holy grail of blockchain trilemma with the significant adoption by the well-known Ethereum plasma project.

Blockchain trilemma is an essential anomaly that every blockchain developer needs to plan for regardless of their expertise and technical know-how. With the widespread understanding of the problem and its complexity, there has yet to be a solution to solve the blockchain trilemma. The advent of various methods is mainly scratching the top without getting to uproot the cause.

 

Deepak Prasad

He is the founder of GoLinuxCloud and brings over a decade of expertise in Linux, Python, Go, Laravel, DevOps, Kubernetes, Git, Shell scripting, OpenShift, AWS, Networking, and Security. With extensive experience, he excels in various domains, from development to DevOps, Networking, and Security, ensuring robust and efficient solutions for diverse projects. You can reach out to him on his LinkedIn profile or join on Facebook page.

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