Cryptheory

24/7 crypto news, cryptocurrency meaning, guides, learning, #cryptohelpschildren

What is scaling and why it is important – Blockchain Trilemma simply explained

3 min read
What is scaling and why it is important - Blockchain Trilemma simply explained

Scaling, scalability, these are the key concepts that most blockchaines solve. Today we look at why this is important. Where are problems and what compromises cryptocurrency technology has to make.

 

Scalability in core of cryptocurrencies

 

You have heard many times that the scalability of cryptocurrencies is critical to the future. So what is it? Essentially, it is the speed with which the network is able to handle user requests. Let us explain by way of example.

 

To send a transaction via BTC, you must first send the transaction to the network where the miners pick it up. The higher the fee you pay, the higher your priority. Miners then place them in the size of a limited block. And once every ten minutes they lock the block and send it to the net. This is then added to the blockchain.

 

The problem arises when there is a lot of transactions and just do not fit into the blocks. And given the limited number of transactions in a block, it is clear that the rate at which the transaction is executed will actually slow down. Finally, you get to the well-known number of about 5-7 transactions per second that the BTC network can handle.

 

Nowadays, scalability will be sufficient to handle approximately 1,000 transactions per second. In the future, however, this number must increase as more users and especially smart contracts, which necessarily require fast scaling to operate.

 

Blockchain Trilemma

 

This brings us to the key information. There is a term in the cryptocurrency community known as Blockchain Trilemma. We can say that these are three key features, which, however, fail to combine. These are scalability, security and decentralization. The following illustration illustrates the problem well.

 

What is scaling and why it is important - Blockchain Trilemma simply explained
The goal is to be in the middle

 

As shown in the figure, blockchains are found on the scale between the three peaks. While ETH and BTC are decentralized and secure, they perform very poorly within scalability. Projects like EOS, Tron or XRP stand elsewhere. They sacrificed decentralization at the expense of scaling. Because they are DPoS systems, they have few verifiers. There is considerable doubt at the EOS whether it really has only one principal verifier in the form of Huobi.

 

Few dare to sacrifice security at the expense of speed and decentralization. And that’s basically the Blockchain Trilemma. And every project wants to be in the middle. The goal is high decentralization, scalability and network security. This is precisely what new emerging projects are looking for, which are looking for new ways to reach consensus within the network quickly and safely.

 

Summary

 

Tron, NEO, EOS sacrificed decentralization at the expense of scalability. Unfortunately, this is a disastrous approach. The networks are under the control of large corporations. This is also why they are unlikely to be more successful in the long run than truly decentralized networks.

 

This is clearly seen in the efforts of ETH (Cardano, for example), which will switch to PoS. This should increase both scalability and decentralization itself, while maintaining a good level of security. On the other hand, for example, is XRP, which is highly centralized.

 

The first to reach the middle point and balance all three features will have a huge competitive advantage. However, it is likely that more than one project will do it at the same time. Hot candidates are ETH, Cardano, Comsos or Algorand. Speculative projects such as IOTA or projects under development such as PolkaDot or Dfinity have the potential.

1 thought on “What is scaling and why it is important – Blockchain Trilemma simply explained

  1. Hello

    YOU NEED HELP TO BUILD SEO BACKLINKS FOR: cryptheory.org ?

    WE SELL HIGH-QUALITY DOFOLLOW POWERFUL BACKLINKS WITH HIGH DOMAIN AUTHORITY, PA, TF, CF…

    ► Rank Higher In Google (google backlinks, DoFollow backlinks, SEO DoFollow backlinks)
    ► Rank Higher Video in Youtube & Google (youtube backlinks, video backlinks, video embedded)
    ► Rank Higher GMB In Google Maps (Google maps backlinks, GMB maps backlinks, GMB embedded, NAP embedded)
    ► Rank Higher Images In Google (google images backlinks, google backlinks)

    You Can Increase Traffic to your websites which will lead to a higher number of customers and much more sales for you.

    If You Are Interested, I’m waiting for your response here => seosubmitter@mail.com

    Thanks, Aracelis Ellsworth

Leave a Reply

Your email address will not be published.