Solving The Blockchain Trilemma – Blockzeit

by Arthur · September 5, 2022

A dilemma is bad, but what about a trilemma? Three times worse, right? Understanding the Blockchain Trilemma is critical to creating viable solutions. Before we can come up with a solution to the scaling problem, we must first understand what causes this dilemma. This article will cover some of the key aspects of the Blockchain Trilemma and its possible solutions.

Table of Contents

Side chains

Side chains are block chains that run parallel to the parent chain. They are used to process large batch transactions and absorb congestion from the base layer. This allows the parent chain to focus on other matters, such as network security, speed and transaction disputes.

However, these chains are not considered a true layer 2 solution and require a more centralized network than the parent chain. This raises questions about how well they integrate with the decentralized nature of the blockchain.

Sidechains are designed to address the blockchain trilemma of scale. They solve this problem by allowing transaction processing to be performed by different servers. The blockchain also avoids the need to duplicate data and ensures that transactions are processed quickly. In addition, these networks are secure and provide high availability.

As demand for blockchains grows, they face the trilemma of scalability. If this problem is not solved, blockchains will become impractical.

Failure to scale will result in slower transaction times. As a result, many users may not be able to complete their transactions quickly, which will result in increased fees and delays.

Byzantine fault tolerant protocols

Byzantine fault-tolerant protocols (BFT) are powerful approaches to achieve high availability and reliability in distributed systems. However, most commercial data centers are not yet prepared to use these techniques because they are too expensive.

BFT works by using copies of the same data in a distributed system to tolerate Byzantine faults. As a result, these systems consume large amounts of resources.

BFT protocols can also be implemented in virtual systems, which reduces resource consumption. A BFT system can support thousands of clients. However, it will require high-performance computing infrastructure. In this way, a high-performance network is essential. Therefore, BFT protocols are not ideal for blockchain systems.

For example, if a network has a latency of a few milliseconds, the Byzantine fault-tolerant protocol would require each node to acknowledge each successful packet. In addition, the system will have to perform voting to ensure consensus.

Create 2 scaling solutions

There are several layer 2 scaling solutions for blockchains, which aim to increase the speed and throughput of the network. These include the Bitcoin Lightning Network and the Ethereum Plasma chain.

They work by leveraging state channels to perform various blockchain activities and report them back to the main chain. Both solutions are very flexible and can be adapted to any network or protocol.

The state channels enable two-way communication between different blockchains, which increases transaction capacity and speed. They also prevent validation of layer 1 network nodes. A state channel is a network-adjacent resource that is isolated by multi-signature mechanisms.

Unlike the Lightning Network, state channels are not subject to Layer 1 network node validation. They also increase transaction speed by facilitating the use of smart contracts. These solutions are currently in the trial phase.

The Blockchain Trilemma is a major design problem for crypto network infrastructures. As the number of transactions grows, validator nodes struggle to verify increasingly complex transactions. They must also achieve consensus among validators on the integrity of pending transactions.

Fortunately, L2 solutions can help reduce network gas costs and speed up the completion of transactions.

Ethereum’s Scalability Problem

There is a serious scalability problem with Ethereum. Although it provides developers with an easy way to create decentralized applications, it does not speed and efficiency required by the real marketplace.

This is a consequence of the proof-of-work system, which requires miners to solve cryptographic puzzles. This causes Ethereum transactions to take a long time and has led to high gas fees. Many users have complained about the problem, citing the need for faster transactions and lower costs.

Final thoughts

The problem has been a major drawback for Ethereum for years. The network can only handle 15 transactions per second and the fees are prohibitively high. With that, it is clear that the network is not designed to grow much. This problem also leaves Ethereum vulnerable to competitors, who offer low-cost transactions at thousands of transactions per second and with little or no fees.

Fortunately, there are a number of Layer 2 scaling solutions available. One such solution is Polygon, which runs parallel to Ethereum’s mainnet and processes transactions outside of it. Polygon is a decentralized Ethereum scaling platform that allows developers to create scalable, easy-to-use dApps with low transaction fees without compromising security.

Both solutions are cheaper than Ethereum and have the advantage of being faster and more efficient. Optimism is governed by an eponymous token called OP, which was sent to early Optimism users in late May 2022.

For more information on scaling solutions, read our article on Optimism.