, 2 years ago
Blockchain technology offers a lot of opportunities for science, businesses as well as the retail market. But each technology has its limits. The blockchain trilemma describes the one problem that no blockchain has solved so far.
Blockchain technology comes with three important main features:
Scalability is about speed. In one sense it measures the time until a transaction is confirmed on a blockchain. It also refers to the amount of transactions that can be handled at the same time. A slow confirmation time with only a couple of transactions per block isn’t very attractive. Therefore, blockchain technology must be scalable.
Security means that each party has to be sure that they can receive, sent and store value without risking losing their assets. A blockchain needs to be secure, otherwise, nobody will put trust in it.
Decentralization refers to the fact that blockchain technologies are meant to prevent the control of a single entity. The more distributed the underlying infrastructure gets, the more reliable becomes the whole network. In this sense decentralization is also a security feature by design.
The blockchain trilemma is basically built around the fact that you cannot get all three features. Putting emphasis on two of them automatically means that you have to sacrifice the third. Bitcoin is a secure and decentralized cryptocurrency because its blockchain is equipped with both features. But its scalability is more than debatable.
A highly scalable solution that is secure at the same time isn’t decentralized. Meaning that a single entity runs the blockchain, but can guarantee in return that transactions are super-fast. But being centralized means that this entity or company could easily exclude anybody from their network.
Blockchains that are highly decentralized and scale very well usually have security issues, because they have to sacrifice in this field to become highly distributed while being fast and offering a high transaction throughput at the same time.
Yes, it can be solved in theory. Still, until this day nobody has succeeded in doing so. At the same time, a lot of cryptos have claimed that they did. The blockchain which solves the trilemma first would be considered the most advanced technology.
But it doesn’t have to be solved, because at this point each technology has its very own use case. Bitcoin is considered digital gold by many analysts because it is secure and decentralized. But it would likely fail to serve as a supply chain management solution because it is too slow.
Mar 15, 2023
Cryptocurrency mining is the process of verifying transactions on a blockchain network and adding them to the public ledger. The process involves solving complex mathematical algorithms using high-powered computers to generate new blocks of transactions. The reward for successfully mining a block is a predetermined amount of cryptocurrency.
Nov 28, 2022
After the successful Ethereum Merge, a potential censorship issue has crept up on Ethereum. In the new block production architecture, an increasing number of transaction blocks is being built by an organization called Flashbots. This organization has chosen to be compliant with the sanctions list of the American OFAC. This poses a risk of censorship on the protocol level of Ethereum. Flashbots is aware of this and has proposed a solution.
Oct 27, 2022
A mining rig is the assembled hardware you need to mine crypto. Bitcoin is the best-known example of a coin that comes into circulation through mining. Doge and Litecoin are also well-known coins in this list.
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