Blockchain Trilemma - Crypto Academy / S5W2 - Homework post for nane15

Hello Guys, It's good to be here once again. Here's my homework post on the Blockchain Trilemma.

A Trilemma is a situation where a difficult decision has to be made between three(3) equally astound alternatives. Unlike a dilemma, a trilemma is not easily solved; because one way or the other, trying to solve it would mean sacrificing one of the alternatives in exchange for the remaining two.

For instance, let's take a look at cars. Everybody likes a fast racing car but what makes a racing car fast? A good Acceleration speed, the grip of the car and not forgetting your safety. For your car to be fast, you need a very good and efficient turbo engine, sport tires and a chassis to suit the physics laws of moving fast. After acquiring all of this and putting it together, you would have a fast car but you would have to tune the car.
Depending on the type of tires, engine and chassis, your car would have a good grip, accelerate very quickly or be safe. So at this point, if you need your car to have a good grip, you'll have to get good tires and a wide and heavy chassis; this secures your safety and grip. but for this, you sacrifice your speed because the heavy chassis is going to slow your car down. If you need your car to have a quicker acceleration, you'll need a lighter chassis; for this, you get a faster car with a little less grip and satisfactory safety.
And finally, if you want your car to be safe to drive, you have to forego the quicker acceleration. So understanding this paints a clearer picture of what a Trilemma is, enough to understand what the Blockchain Trilemma is.

In my opinion, the Blockchain Technology is perfect but like every good thing, it has its shortcomings. The Block Trilemma is a concept made up by Vitalik Buterin, one of the co-founders of Ethereum, that highlights the problems associated with BlockChain Technology. This concept emphasizes that the three core problems of BlockChain Technology are Decentralization, Scalability and Security.

The Bitcoin and Ethereum networks are the two most popular BlockChain networks in the game; and with the aid of different and multiple technologies, they can solve some of the challenges. The Bitcoin Network, for instance, uses the Proof of Work(PoW) Consensus Mechanism that emphasizes security and decentralization, but unfortunately doesn't do very well in terms of scalability.
Scalability is the genesis of the trilemma. Instituting full scalability into the PoW BlockChain technology affects decentralization and security. The Proof of Work Consensus mechanism is unable to solve the scalability issue effectively because miners have to compete to solve complex mathematical functions before a block can be validated and this takes time. Hence no matter the number of miners available, the number of transactions that can be validated at a given time is limited and thus doesn't make the Proof of Work Blockchain Scalable.

In recent times, Ethereum has broadcasted the release of a new blockchain upgrade called the Ethereum 2.0 that can handle and solve the Trilemma. This Blockchain Upgrade seeks to make the blockchain scalable while maintaining its decentralization and security.

Even though Cryptocurrencies and Blockchains have been around for over a decade, I believe the Crypto world is now fully understanding the work of Satoshi Nakamoto. So in as much as, the blockchain trilemma, it doesn't undermine the fact that it can be solved. Even though there isn't any blockchain that has successfully been able to resolve all the problems concurrently, with time new technologies would evolve and more findings would be made to resolve the trilemma.

Decentralization refers to the governance of a system or network by itself or by democratic autonomy.
Decentralization is the basic and core block that blockchains are built on. This refers to the permissionless network that delegates equal power to all its users. It makes blockchains secure and free of third parties, intermediaries and central entities that manage and control the running of the network.
With decentralization, users manage every single aspect of their accounts and it is still as secure as ever. This is made possible by the consensus mechanisms these blockchain networks use. For example, the Proof of Work(PoW), Proof of Stake(PoS) and DPoS have constructive protocols that help to check and ensure that the networks stay decentralized. One thing is that most protocols make decentralization possible with the use of the PoW Consensus Mechanism. This is very tedious and energy-consuming as mining to solve complex mathematical functions is the only to validate the blocks. Usually, BlockCHain networks are unable to achieve a high throughput count resulting in the blockchains not being up to scale.

As cryptocurrencies are gradually being implemented into our daily financial routines, the number of users are increasing by the hour. So scalability becomes very necessary. Scalability refers to the ability of a system to adapt to the change or increase in the number of its users to make it faster and quicker to use. Blockchain technology is everything but fast, but to be fully accepted into the system, blockchain technology has to be free of faults or let's say it has to be better than its competitors ie. the centralized systems.
The likes of VISA have high scalability compared to blockchain technology, hence it can handle and process as many as 1700 transactions per second whereas the King of Crypto's Blockchain processes an average of 4.6 transactions per second. Centralized systems choose scalability and security over decentralization.

The security of a blockchain above all is very important. Aside from the fact that blockchains were made purposely to be decentralized, it was made with their security in mind. It is as a result of the emphasized security of blockchains that gives it very low scalability. And this is understandable because the security of your user's assets should come before every other thing. This is why Satoshi Nakamoto is given all the due respect because in implementing the Proof of Work Bitcoin blockchain, he made validation so difficult that before a hacker would be able to steal or manipulate data, the hacker would have to get 51% validation from the other nodes; which is seamlessly difficult. But one thing is certain, if you can get a 51% validation from the other nodes, then why not mine for yourself?

From the lecture, Professor @nane15 spoke about and elaborated on Layer-1 and Layer-2 as readily available ways to resolve the trilemma. Upon reading further, I understood and realized that these approaches would indeed prove effective.

Layer-1 gives solutions that seek to attack and resolve the problem from its roots. That is, it seeks to better the state of the main blockchain in order to give it higher scalability, while with equally high security under a decentralized umbrella. Some of the solutions under Layer-1 are;

Sharding is a method of partitioning the blockchain into shards, so as to handle and process transactions separately in a distributed manner; but since it is partitioned, the shards act to handle the transactions. So this means, with more shards, the blockchain handles and processes more transactions.

Revising the consensus mechanisms to improve on them. The early blockchain networks(ie. BTC, ETH, LTC) all run on the PRoof of Work Mechanism. All though it is highly secure and decentralized, it has a major problem with its scalability. In recent times, there have been new and improved consensus mechanisms like the Proof of Stake mechanism and Ethereum has taken a bold step to build the Ethereum 2.0, which uses the Proof of Stake mechanism. So if the blockchains are able to migrate and adopt the Proof of Stake mechanism, it would undoubtedly resolve the trilemma.

Layer-2 offers solutions that seek to create child networks on the main networks in order to help resolve the problem faced by the main blockchain.

Hierarchically nesting the networks; with this, the main block reduces its workload by transferring part of the work to the nest of child networks. This increases scalability, decentralization and security.

Another way is to build off-chain channels that communicate with the parent chain to help solve the problem and reduce the load on the main blockchain.

I have a strong conviction that it is just a matter of time before the Trilemma becomes a thing of the past. With the way Cryptos are growing, I think a lot of individuals and companies would really invest in the scalability of blockchains and if indeed, what the Ethereum 2.0 is prospected to do is true, then I believe the trilemma has been resolved as it stands. But all we can do is wait to see if it really works out because it is only time that can tell.