The Blockchain Trillema

Web3 is all the rave right now. It is seen as the future of the internet and a successor to the current standard dubbed web 2.0. In Web 2.0, data and power are concentrated in the hands of a few tech giants, think Apple, Facebook, Google, Amazon and Microsoft.

These are just a couple of companies monopolizing -- because a large majority of them don't have competitors -- the market and while it is true that they provide essential services for the internet-connected consumer, it doesn’t erase the fact that they hold significant power over us.

The future of the web(web3) aims to be a paradigm shift distributing power and control to individuals rather than large conglomerates. The backbone behind all of this lies in blockchain technology where this iconoclastic movement would emerge disrupting legacy institutions.

Blockchain is a necessary part of this new stage on the internet and in a new part of human civilization ensuring that societies are more equitable. Access to financial services -- just one example of blockchain utility -- are made seamless, transparent and pseudonymous. Transparency and pseudonymity seem like they don’t go together but that’s what the blockchain is. A distributed ledger system, utilizing a consensus mechanism open for all the world to see and verify whilst still making users pseudonymous

Many Herald this new technology as required for societies to reach their full functionality but as with any new tech, it isn’t without its challenges. The Blockchain trilemma is a major part of those challenges. The blockchain trilemma consists of decentralization, security and scalability.

These three core areas are seen as impossible to simultaneously solve and trying to solve one, inevitably compromises the other. Blockchain value proposition lies in the ability to have a consensus mechanism that’s public and open to unmitigated access thereby making it impossible to shut down by one central authority based on their whims. Unfortunately, this pro isn’t without its compromises, one example being the bitcoin blockchain which is sufficiently decentralized by thousands of nodes around the world and secure through a consensus mechanism through its proof of work system but because of that same consensus mechanism, the amount of TPS the bitcoin blockchain can perform is a measly 7TPS.

TPS here means Transaction per second.

This is still largely inadequate for supporting millions of users around the globe and this issue with scalability is what must be solved before blockchain technology can gain mass adoption.

Understanding the three pillars of the trilemma would help in working towards solving it.

Decentralization The very first feature of a blockchain network is that it is decentralized. This means that there is no central authority that determines who can and cannot use the network. This makes it transnational ensuring unmitigated access to anyone with an internet-enabled device. Decentralization is a core part of the emerging infrastructure and therefore cannot be compromised. Unfortunately, certain blockchains have had to become a bit more centralized to solve the scalability issues, this is because the higher the number of the nodes, the longer it takes for validation to take place. Centralized chains are able to increase their TPS so increase the number of users they support.

Security A blockchain must be secure to prevent bad actors from taking advantage of the system. This could be in the form of double-spending where a large number of nodes work towards modifying already mined blocks, gaming the system and causing massive loss of funds. Bitcoin a prime example ensures security through its proof of work consensus mechanism, ensuring that blocks are verified and there is no chance of exploiting the system. Security is vital especially in financial infrastructure because users need to be able to sufficiently trust the system won't be compromised. This is a part of the trilemma that should not be compromised.

Scalability Since blockchain is heralded as the next stage in the internet revolution, it must be sufficiently able to onboard millions of uses and process massive amounts of transactions in seconds and nanoseconds. It should be easily accessible to users from third-world countries who might not have access to high bandwidth devices. Scalability is still a prominent issue the decentralized systems fail at in comparison to centralized ones. VISA is able to manage 1700 transactions in one second and this is in comparison to 17TPS of the Ethereum blockchain famously known for its smart contract capabilities

It is obvious that with any nascent technology, there are bound to be myriad challenges. Challenges that might at first make it seem like it's far fetched, it wouldn't work or kick off the ground.

The internet had its fair share, the web did and the rise of web2 giants had as well, yet those challenges were identified and sufficiently tackled as the technology got better. Blockchain-based systems would achieve success if they are sufficiently able to recognise these problems and work towards making a solution.

This would lead to a more equitable world with access open to everyone no matter where you live. The Ethereum Foundation is planning on migrating to a POS protocol, a move from the POW system which is energy-intensive and costly to transact on. Many more altcoins dubbed Ethereum killers have also come up with similar POS and POH technologies to solve this trilemma. Yet, an investigative eye would still reveal lapses in these problems they claim to solve.

We do hope that the trilemma is sufficiently and confidently dispelled because that is the one path towards creating the next wave of the internet. The internet for all.