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The blockchain trilemma

The blockchain trilemma

We've already covered scalability issues in the past: Ethereum and Bitcoin can only do a minimal amount of transactions per second. Bitcoin averages 5 tps, and Ethereum hardly doubles that number, while VISA claims to process 1,700.

Scalability has spurred innovation, giving engineers a problem to solve, and Layer 1 alternatives and Layer 2 solutions came to the rescue (an intro to Layer 1 and Layer 2, here). But when it comes to solving the scalability problem, we must never forget the blockchain trilemma.

Coined by Vitalik Buterin, the blockchain trilemma refers to the balance between the three essential ingredients of a blockchain: scalability, security, and decentralization. An improvement in one of the corners of the triangle usually involves losing power in the other pillars.

The blockchain trilemma

This concept is more a mental model than an actual theorem. Still, it is generally an excellent way to look under the hood of the different solutions, because more often than not, speed, security, and centralization are hard to balance.