The Scalability Trilemma

One of the most talked about questions in the blockchain community at the moment is figuring out the exact ratio between Scalability, decentralization and security also referred to as the Scalability trilemma or Vitalik’s Trilemma as a reference to Vitalik’s twitter discussion about the same.
The scalability trilemma refers to the problem with finding the most efficient strategy between the three main Blockchain fundamentals, scalability, decentralization and security. One cannot fully express its potential without certain restriction or drawbacks with the other. Each concept is regarded as one of the core ideologies behind the blockchain protocol and is the center of immense debate among enthusiasts and architects alike.

a. Scalability

Scalability loosely means the growth of the capabilities of a system or a network that accumulates the increasing participation within the system or network. In virtual terms, scalability is the need for adding additional resources to accommodate the increased load that is brought in by continuous growth. A network is said to be scalable if it can accommodate the increased inflow of data by adding an equivalent amount of required resources.

b. Decentralization

We are increasingly shifting to a community that regards anything related to “centralization” as being highly frowned upon. Anything, from centralized exchanges to centralized governments are feeling the heat, as there is a clear shift of opinion of control from the few to the many. The introduction of bitcoin seemed to have fuelled this shift of opinion by being the first truly decentralized means of value transfer. Decentralization is the ability of any mechanism to immune to minority control and influence, where the opinion of the majority actually means something, and most importantly where the decision-making process is distributed and delegated as per the protocol followed by the mechanism.

c. Security

Digital security is quite possibly one of the greatest drawbacks of the Internet since its inception. To be resistant from network attacks and scams, layers of encryption protocols such as IPSec, IPv6, SSL, etc., have to be built on top of the existing internet protocol, and even that doesn’t guarantee absolute protection. Vested interest somehow manages to get away by making use of the loopholes and drawbacks associated with the encryption. When it comes to distributed security, there arises an even greater problem of securing information as all information is supposed to be public and transparent. Thus, there exists a need to carefully evaluate each strand of data that is published on the distributed network, by looking for the incentive that comes along with making the information public. But there is a ray of light in this darkness. Distributed systems provide an innovative platform for maintaining security, which is providing immutability to information that is computed on the distributed database.

a + b + c

Now here comes the immensely important discussion that needs solving. How does one solve this problem with maximum efficiency? It is agreed that both Scalability and Decentralization are on a wide spectrum, meaning that an absolute and true definition of either cannot be settled on. Therefore, it is within the hands of the developers of various consensus protocols to get this equation right.

In the bitcoin community, it is seen that decentralization and security don’t seem to be much of a problem (except the debate about a little centralization of mining), but when the topic shifts to scalability, the entire community falls into a sort of delirium, with no group providing a legitimate solution. As Andreas Antonopolous was once quote saying, “Bitcoin is not absolutely decentralized, but it is the most decentralized mechanism out there”. Some players have even gone as far as splitting the model into various versions and updating features to make the newer and copied version more scalable, but even that has gained much criticism.

The Ethereum ecosystem seems to have realised the problem before hand and have been continuously putting their resources to find legitimate strategies to this problem. With the on-going research on the Casper protocol, the focus on improving sharding and the much awaited Proof of Stake consensus mechanism will give Ethereum a ground for testing their innovation. It remains to be seen whether these updates to the Ethereum network are in fact a well-managed, long-visioned solution or just another failure that the competition could learn from.

There are numerous examples that can be put forward, like the BCH vs. BTC debate about Block size, the IOTA network freeze, the much criticized high-fee period of BTC in late 2017, and so on, all of them pointing towards the same thing. How to scale fast, be decentralized and not lose any of the security promised by the Blockchain?

Conclusion

There hasn’t been any definite solution to the problem at hand so far. But that is nit to say that won’t be any. It is of utmost importance for cryptocurrencies and Blockchain networks to scale, secure and decentralise their capabilities to a place that is magnitudes higher than the current one. It is estimated that about 28 million people currently are directly involved in cryptocurrencies. That number is so small that is only takes up 0.0035% of the entire human race. So when talks about getting the financially illiterate and accumulating the entire world to come under a single peer-to-peer currency come to light, it is crucial to understand that without an immense amount of resources into researching a solution for the trilemma, there is a long path towards mass adoption.

Sources:

1.Maxkanaskar' Blog

1. Statista

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