Blockchain Trilemma
21 Nov 2023 by Harry Newman 3 min read
Blockchain Trilemma

Coined by Vitalik Buterin, co-founder of Ethereum, the blockchain trilemma is a set of three main issues that developers encounter when building blockchains.

These are decentralisationsecurity and scalability.

Developers ultimately have to sacrifice one to accommodate the other two, it is widely believed that decentralised networks can only provide two of the three properties.

What Is The Blockchain Trilemma

The blockchain trilemma is a fundamental issue at the heart of blockchain technology.

Blockchain technology has its limitations, blockchains face the challenge of achieving optimal balance between the three core problems.

Security of a blockchain involves protecting the network from attacks and ensuring the integrity and immutability of data recorded on the blockchain.

Scalability of a blockchain  involves the ability of the network to handle large volumes of transactions efficiently without compromising performance.

Decentralisation involves distributing control and influence across a wide range of nodes and validators, rather than having a centralised network run by one entity or a select few.

The blockchain trilemma suggests that at any given time, a blockchain can only effectively satisfy two of the three properties, at the expense of the third. 

For example, a network that aims to be both scalable and decentralised might need to incentivise a substantial amount of active participants to achieve high security. 

A network that prioritises scalability and security might increase the operational cost of running a node, potentially compromising decentralisation. 

Networks that focus on decentralisation and security tend to have scalability bottlenecks, slower transaction times and higher costs. 

All is not lost however, there are layer 2 solutions available that help to combat this, with layer 2 solutions such as the Lightning Network which helps the Bitcoin blockchain. 

Blockchain Trilemma Solutions

The blockchain trilemma poses a significant challenge in the development and adoption of blockchain technology.

There is no law stating that the three aspects cannot be achieved, although this currently hasn’t been done. 

Projects are working on different approaches in an attempt to maximise all three.

There are different solutions for different blockchains, for example, Bitcoin has its own layer 2 solution called the Lightning Network. 

Whereas Ethereum has rollups such as OptimismArbitrum and Polygon

Protocols like Polkadot and Cosmos aim to facilitate interoperability between multiple blockchains, which can help distribute the load and balance the trilemma by allowing different chains to specialise in different aspects. 

Final Thoughts 

The blockchain trilemma is a significant challenge to blockchain technology.

Whilst current solutions offer a way to mitigate certain inefficiencies, there remains a quest to reach an ideal balance of security, scalability and decentralisation for a blockchain by itself. 

Blockchain technology is still in its infancy, over time the blockchain trilemma could be solved.

Blockchain technology and the ecosystem are constantly evolving, with new innovative ways to help combat the blockchain trilemma, will the blockchain trilemma always be an issue, I guess we will have to wait and see.


What Is The Blockchain Trilemma?

The blockchain trilemma is a set of three main issues that developers encounter when building blockchains. These are decentralisation, security and scalability. 

Whilst no law states this can't be done, no blockchain has yet to achieve all three by itself effectively. 

What Solutions Are There To Blockchain Trilemma?

Solutions to help combat the blockchain trilemma include layer 2 solutions and blockchains such as Polkadot and Cosmos that facilitate interoperability to help balance the trilemma issue by allowing different chains to specialise in different aspects.

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This article is intended for educational purposes and is not financial advice.