What is the blockchain trilemma?

Trilemma (noun) - a situation in which a difficult choice has to be made between three alternatives, especially when these are equally desirable.

Background

The decentralization, security, and scalability (DSS) trilemma of blockchain has a predecessor in the CAP theorem in theoretical Computer Science.

The CAP theorem states that any decentralized data store can provide only two out of three guarantees - Consistency, Availability, and Partition tolerance. 

Blockchain systems typically achieve eventual consistency through mining and block creation.

The Blockchain Trilemma 

The Blockchain Trilemma refers to a widely held belief that decentralized networks can only provide two of three benefits at any given time concerning decentralization, security, and scalability. 

Decentralization - Blockchains distribute control over the network equally to all participants rather than being managed by a single entity. This is the central ethos of the Blockchain movement, which removes the role of intermediaries. 

Security - Blockchain networks should have ironclad defenses that prevent malicious entities from taking over.

Scalability - Blockchains should support an enormous number of transactions and users without faltering by increasing fees and transaction times.

While Bitcoin and Ethereum currently offer significant decentralization and security, both suffer from scalability issues.

Other blockchains like Solana are scalable, but decentralization is in question since about half of the tokens are owned by insiders (company and VCs).

Proposed Solutions

The blockchain community has been hard at work looking at several approaches to address these issues, with a strong focus on scaling.

Some of them are:

• Sharding
• Variations of Proof of Stake
• Nested blockchains
• State channels like lightning network
• Side chains

A newer blockchain called Algorand claims that it solves the DSS trilemma through its unique Pure Proof of Stake (PPoS) consensus mechanism.

A "committee" of nodes chosen through a cryptographically run lottery decides which blocks get added to the Algorand blockchain.

Summary

The number of blockchains is increasing, and the interest in solving the blockchain's underlying problems is also growing. 

This is an excellent sign as each community brings its take and understanding of the DSS trilemma's possible solutions.