Is Blockchain Technology really flawed? | Addressing the Blockchain Trilemma.
Adulthood is known for its responsibilities and the challenges that come with them. It is usually more about the overwhelming duties than about freedom to do (I am sorry if you have been lied to).
A stage of adulthood opens up to the struggle of work-life balance. It is a wide-held belief that it is impossible to maintain a healthy balance between work, social life, and sleep/rest. One or more is always sacrificed for the other such that the “freedom-to-do” is always limited by this challenge.
The blockchain trilemma exists in a similar pattern.
Though blockchain technology is justifying its utility in various industries, the flaws of this disruptive innovation are posing certain limitations to the mainstream adoption of this technology.
The Blockchain trilemma — a term coined by Vitalik Buterin, encompasses the flaws of Blockchain technology: Security, Scalability, and Decentralization.
According to the Blockchain trilemma theory, decentralized networks can only accommodate two out of three benefits, hence having to sacrifice one.
Decentralization.
Unlike centralized networks which operate on user-developer relationships, public blockchain networks operate on the principle of decentralization through the use of consensus mechanisms.
The consensus mechanism refers to a network of nodes on the network which validate and authenticate transactions and data consensus over the network.
Rather than being controlled by a central server, a blockchain network distributes control to all the nodes (participants) of the network.
These nodes validate every data or transaction on the network before they are put into blocks and stored on the blockchain. This method cedes control to every participant of the network, hence there is no central authority to censor or control data.
Applying decentralized technologies eliminates the need for third parties as well as monopoly (centralized authority). For optimal decentralization, there is a need for more nodes to be added to the network.
The addition of more nodes leads to the creation of more Proof-of-Work (PoW) mechanisms, hence, a reduction in the speed of transaction.
Security.
To increase transaction speed on a blockchain network, the addition of new nodes on the network must be reduced, either numerically or geographically.
However, this encourages centralization, defeating the goal of decentralization and threatening the security system of the blockchain network.
Limited nodal distribution puts the network at risk of security threats, as hackers can confiscate 51% hashing power to take over the network and manipulate it at ease.
Perpetrators of this attack can manipulate the PoW consensus, resulting in data manipulation or currency theft (in the case of cryptocurrency blockchain).
Security on blockchain networks is critical and sensitive, hence, cannot be compromised.
Scalability.
The ability to increase the transactional speed of the network despite increased nodal distribution is called Scalability.
For a blockchain network to be scalable, it means that as its use cases and mainstream adoption increase, the network can still process multiple transactions per second with ease.
To achieve mainstream adoption, a blockchain network must offer scalability. Scalability gives blockchain networks the edge to compete with centralized networks in mainstream adoption.
However, because the focus of blockchain technology is on security and decentralization, scalability is commonly sacrificed to accommodate both.
Proposing Solutions.
Like many problems, solutions to these problems are birthed with invention and innovations.
The question is not whether there will be solutions, but how soon can these solutions be created and eventually adopted.
The invention of layer 1 and layer 2 protocols offers unlimited solutions to the blockchain trilemma. Unlike the Bitcoin blockchain which accommodates only layer 1 and 2 solutions, the Ethereum blockchain offer layers 1, 2, and 3 solutions extending the infinite capacities of this network.
Near Protocol, a layer 1 blockchain has not only offered scalability through sharding technology but also interoperability through Aurora, an Ethereum Virtual Machine. Curious to know how? Click here.
Bitcoin blockchain currently houses the Lightning Network, a layer 2 protocol, while Ethereum Blockchain houses various layer 2 protocols like Polygon.
Interested in knowing how these protocols offer solutions to the blockchain trilemma? Hit the follow button to get notified when I post.
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