The Impossible Trinity, 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. The term scalability is sometimes confusing because, for example, the Proof of Work (PoW) system (like Bitcoin) is scalable upon new participants joining the network, automatically adjusting the difficulty of mining; the network can tolerate any number of nodes that exist within it.
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 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.
