A dilemma is bad, but what about a trilemma? Three times worse, right? Understanding the Blockchain Trilemma is essential to creating viable solutions. Before we can come up with a solution to the scaling problem, we must first understand what is causing this dilemma. This article will cover some of the key aspects of the Blockchain Trilemma and its possible solutions.
Sidechains are blockchains that run in 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, like 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 have been 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 fast. Additionally, these networks are secure and provide high availability.
As the demand for blockchains grows, they face the trilemma of scalability. If this problem is not solved, blockchains will become impractical.
The failure to scale will cause transaction times to slow down. As a result, many users may not be able to complete their transactions quickly, which will lead to increased fees and delays.
Byzantine fault-tolerant protocols
Byzantine fault-tolerant protocols (BFT) are powerful approaches to achieving 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 utilizing 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, it is crucial to have a high-performance network. 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 every node to acknowledge every successful packet. Moreover, the system would need to perform voting in order to ensure consensus.
Layer 2 scaling solutions
They function by leveraging state channels to perform various blockchain activities and report them back to the main chain. Both solutions are highly flexible and can be adapted to any network or protocol.
The state channels enable bidirectional communication between different blockchains, increasing transactional capacity and speed. They also prevent validation by 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 experimental phase.
The Blockchain Trilemma is a major design concern for crypto network infrastructures. As the number of transactions grows, validator nodes struggle to verify increasingly complex transactions. They must also reach consensus between validators on the integrity of pending transactions.
Fortunately, L2 solutions can help reduce network gas costs and speed up transaction finalization.
Ethereum’s scalability problem
There’s a serious scalability problem with Ethereum. While it provides developers with an easy way to create decentralized applications, it doesn’t have the speed and efficiency required by the real-world marketplace.
This is a consequence of its 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 issue, citing the need for faster transactions and lower costs.
The problem has been a major drawback for Ethereum for years. Its network can only handle 15 transactions per second and the fees involved are prohibitively high. With that, it is clear that the network is not designed to grow much. This issue also makes Ethereum vulnerable to competitors, who offer low-cost transactions at thousands of transactions per second and little or no fees.
Fortunately, there are a number of layer 2 scaling solutions available. One such solution is Polygon, which runs in parallel to the Ethereum mainnet and processes transactions outside of it. Polygon is a decentralized Ethereum scaling platform that allows developers to create scalable, user-friendly dApps with low transaction fees while never 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 airdropped to early Optimism users in late May 2022.
For more information on scaling solutions read our article on Optimism.
I write about blockchain, crypto, NFTs and other disruptive technologies and innovations.