Blockchain Trilemma

The blockchain trilemma is the idea that blockchains have difficulty achieving security, scalability, and decentralization simultaneously. Each comes at the cost of the other two. 

The idea was first advanced by Ethereum co-founder Vitalik Buterin in 2017 and has shaped the way developers think about blockchain innovation ever since.

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Tug of War

Why is it tricky for blockchains to simultaneously handle a growing number of transactions (scalability), be open and democratic (decentralization), and remain safe from hacks (security)?

You can think of it like a three-way tug of war. Here’s how each factor tugs at the other two:

“You can’t buy coffee with Bitcoin”

Bitcoin is a textbook example of the trilemma. It was designed to be deeply committed to security and decentralization, making it extremely resilient to attacks and impervious to centralized control. 

But this commitment slows the network down to the extent that it’s not feasible to use Bitcoin for everyday transactions. While there are so-called “layer 2” solutions built atop the Bitcoin blockchain that can make transactions quicker, the common refrain “you can’t buy coffee with Bitcoin” is mostly true. And that’s by design: Bitcoin wasn’t designed to be fast–it was designed to be uncompromisingly secure and decentralized. 

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