Blockchain Trilemma - Crypto Academy / S5W2 - Homework post for nane15
It has generally been observed in the blockchain world that all the basic features and attributes of a blockchain which includes scalability, decentralization as well as security can't be perfectly maintained or effective at the same time. This was exactly what brought the idea of the blockchain trilemma. So let me quickly go through and the answer as provided by our brilliant professor.
Explain in your own words what the Blockchain Trilemma is
Let me independently break down the two terms used in this concept (Blockchain and Trilemma).
Blockchain as it is now very popular especially in the crypto world, refers to a very large system that can be used to store records of transactions done in the past as well as transactions transactions taking place in the present.
If I should describe trilemma in a diagrammatic way I would say it looks like a triangle, and it means or represent that out of the 3 provided options, 2 of the options can be considered to run the system effectively. Below is a diagram I designed to show 3 attributes or features of the blockchain of which only 2 can be considered.
designed by me using iMarkupSo in simple terms, Blockchain Trilemma refers to the incapability of a blockchain to support all it's 3 main features and attributes which includes blockchain security, decentralization as well as it's scalability at the same time.
Out of the 3 attributes I mentioned earlier, it has been observed that only 2 of these attributes can effectively be maintained at the same time in a blockhain. In other words, all the 3 features of a blockchain can't possibly be active or effective all at once.
So for a blockchain project to be effectively put in place, 2 of the most preferred features will be considered while the remaining 1 will not be considered.
Is the Blockchain Trilemma Really a Trilemma?
If am meant to answer this question directly, I would say Yes for now, the blockchain trilemma is really a Trilemma because almost all the blockchain projects are lacking in one feature or the other.
Although big blockchain projects like Cardano have gone a long way in trying to solve this issue, and to some extent they have achieved this because the Cardano blockchain is Secured as it is built on the PoS mechanism, It is equally very scalable as it's transaction speed increases to 1 million transactions per second. And over the years the blockchain has gradually become decentralized. Nevertheless, it is observed that the blockchain have not officially put it into practice.
All other blockchain projects are looking for ways to solve the trilemma that is in the crypto blockchain space, and hopefully in the future they would be good results, but as of now the blockchain trilemma is really a Trilemma.
Defination of the following concepts:
Decentralization in respect to blockchain, refers to the situation where by each and everyone is permitted to have access to virtually every necessary information and details in a blockchain without any form of interruption or intervention from any particular set of people at the top. So in simple terms, decentralization is just a way of circulating equally power to everyone in a given system.
We cannot overlook the importance of decentralization to the blockchain space, but you would agree with me that the population of the various users would make the system to become slow in respect to transactions.
Scalability simply refers to the speed rates at which the various networks operate in regards to the processing of transactions. This speed rate is closely related to the size of the given work. So the two concepts that should come to your mind when you hear about Scalability should be the number of users as well as the speed rate per second.
Research has it that out of these 3 attributes of a blockchain, scalability remains the most difficult attribute to achieve. Nevertheless, some blockchain projects today are very efficient in respect to speed, and some have even surpassed the VISA network which supports over 1680 transaction per second.
Talking about blockchain security in simple terms, I would say it's all about avoiding all the possible forms of attack that could hinder the safety of a network and it's activity. That's why hash rates of various blockchain projects are very high, so as to avoid the 51% attack.
It has been observed that blockchain security remains the most important concept among the 3 different attributes, because security determines the safety of the project. And in most cases, the blockchain security is considered before any other feature and the blockchain security can't be left for either of the other two attributes.
Based on your knowledge, explain at least two viable solutions to the challenges posed in the Blockchain Trilemma
Like I said earlier, there hasn't been a blockchain project that have officially solved this blockchain trilemma, but after the Etheruem 2.0 launches we might find out if the trilemma has really been solved or not. Nevertheless, here are two possible solutions that could solve this trilemma issue.
Implementation of layer 2 for scalability issues: This layer 2 are the little chains created to support the main chains like Ethereum and Bitcoin in respect to speed. Examples of these little chains (layer 2) are Roll-ups, Sidechains, Plasmas etc.
So if these layer 2 chains are implemented on blockchains using security and decentralization, it will go a long way in solving the scalability aspect that is left aside, making the blockchain a complete and more effective one.Implementations of better Consensus Mechanism: This would be another big step to control a blockchain that is using security and decentralization. For a blockchain network like Bitcoin that is decentralized and currently using PoW consensus mechanism, it will be difficult for it's speed rate to get better, because of the work load attached to the network. So if a blockchain network like Bitcoin could change to a more scalable consensus mechanism like PoS, it will go a long way in solving the scalability issues that has been left aside. That's why the Etheruem 2.0 would go a long way in solving the blockchain trilemma because the network is planning to improve to the PoS consensus mechanism.
The founder of Etheruem Vitalik Buterin was the man that brought up this concept in the first place and he is equally the one that is in charge of the Etheruem 2.0 that will be launching very soon. So many people believes that he has a way to solve the blockchain trilemma which brought up. So we are all waiting and hoping that after the launch of the Etheruem 2.0 the blockchain trilemma would have been solved.
So far, I have learnt alot from your lecture Professor @nane15, and am glad that you brought up such and educative lecture for us this week.