The Blockchain Trilemma refers to the assumed mutual exclusivity of digital ledger security, scalability, and decentralization.
- Overview
- Security
- Scalability
- Decentralization
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Overview
The trilemma arises because it's currently very challenging to maximize all three of these attributes simultaneously. For instance, increasing scalability often comes at the cost of decentralization, as larger block sizes or faster block times can lead to a greater concentration of mining power. Similarly, improving security can require sacrificing scalability or decentralization.
Security
This attribute refers to the ability of the blockchain to resist attacks such as a 51% attack, where a single entity gains control of more than half of the network's mining hash rate, potentially allowing them to disrupt the network by double-spending coins.
Scalability
This refers to the capacity of the network to handle a large number of transactions per second. Many early blockchains, like Bitcoin, have struggled with scalability issues, which can lead to slow transaction times and high fees.
Decentralization
Decentralization is the degree to which control and decision-making within the network is distributed among participants, rather than being concentrated in a single central authority. High levels of decentralization are often seen as desirable because they can make the network more resistant to censorship and manipulation.