Scalability Trilemma
The blockchain scalability trilemma, also known as blockchain trilemma, is one of the greatest hurdles for cryptocurrency. It states that blockchains can only simultaneously achieve two out of either decentralisation, scalability, or security — but never all three.
Scalability determines the network’s capacity, including the number of nodes it has, how many transactions it can process, and how quickly it can process them, amongst other factors. Throughput, finality, and confirmation time are the three main bottlenecks for a blockchain’s scalability.
Decentralisation refers to the degree of diversification in ownership, influence, and value on a blockchain. Cryptocurrencies are generally decentralised since no single party can govern the whole network. However, decentralisation is a spectrum rather than a binary ‘yes or no’, and there are different levels of decentralisation across various blockchain projects, including Bitcoin and Ethereum.
Security is the level of defensibility and resistance to tampering that a blockchain has against attacks from external sources. There are many attack vectors in a blockchain system, including double-spending, distributed denial-of-service (DDoS), and 51% attacks.
Key Takeaway
The blockchain scalability trilemma states that blockchains can only simultaneously achieve two out of either decentralisation, scalability, or security — but never all three.