Why Can't Blockchain Have Everything? The Trilemma Puzzle Explained

Problem That Afflicts the Entire Industry

Imagine a network that is controlled by everyone and no one at the same time. One that is indestructible and yet ultra-fast. Sounds like a dream? This is the blockchain trilemma – a puzzle that Ethereum co-founder Vitalik Buterin popularized as one of the biggest challenges in the cryptocurrency industry.

It is clear: blockchain technology promises that a decentralized network can replace banks and intermediaries. However, every blockchain network must face three goals that are difficult to achieve simultaneously:

• Decentralization – no player has a monopoly on control
• Security – the network is resistant to attacks and manipulations
• Scalability – can efficiently handle billions of transactions

You fix one? You usually lose on the other two. That's the blockchain trilemma.

Three Pillars That Exclude Each Other

Decentralization: Power Distributed

Traditional bank? One institution manages the money and the transaction ledger. Bitcoin or Ethereum? Thousands of nodes, each storing a copy of the entire history. No one has privilege – everyone must agree.

It's a beautiful idea, especially in the context of Web3, where users regain control over their data instead of handing it over to megacorporations. But it comes at a price: consensus takes time.

When Bitcoin has to agree on each transaction among tens of thousands of participants, it averages about 5 transactions per second (TPS). Ethereum reaches 18 TPS. Visa? A few thousand TPS in a centralized system. The difference is colossal.

Security: Protection Against Chaos

Without blockchain security, it's just another database. Hackers could alter transaction history, and the network would collapse.

Bitcoin accomplishes this through Proof of Work (PoW) – participants known as miners solve complex mathematical puzzles to add a block to the network. This requires a lot of energy and time, but it ensures that tampering is unprofitable. Each block is secured by a unique digital signature (hashem), so any alteration is immediately visible.

The more miners or validating nodes in the network, the more secure it is. Theoretically, if someone controlled over 51% of the network's power (the 51% attack), they could take control. But in a distributed network, this is practically impossible.

Problem? PoW is slow and energy-consuming. You strengthen security at the cost of scalability.

Scalability: Throughput As a Dream

For blockchain to be adopted by several billion people, it must process transactions quickly, cheaply, and reliably. Today? Only a few to a dozen TPS in most large networks.

Decentralization and security require that every transaction be verified by independent validators. This slows everything down. If you increase throughput by reducing the number of validators or simplifying consensus rules, you risk decentralization and security.

This is the essence of the blockchain trilemma.

How is the Industry Trying to Solve This Nightmare?

Sharding – Dividing into Smaller Pieces

NEAR Protocol is experimenting with a technique called sharding. Instead of a single chain, the network divides into multiple parallel partitions (shards), each with its own ledger. The main chain coordinates interactions between them.

Result? NEAR supports 8 active shards and finalizes transactions in about 600 milliseconds. This is significantly faster than traditional approaches, and decentralization is maintained.

New Ways to Achieve Consensus

Proof of Work is not the only way. Proof of Stake (PoS) allows validators to stake (lock) their tokens instead of mining complex puzzles. Less specialized hardware, more accessible to everyone.

BNB Smart Chain moves forward, using Proof of Staked Authority (PoSA) – validators stake BNB and achieve a block time of just 3 seconds. This is a leap in scalability with consolidated security.

Conflux combines elements of PoW with a Directed Acyclic Graph (DAG) structure to accelerate processing without sacrificing security.

Off-Chain Solutions – Layer 2

When the main network cannot handle itself, why not build on top of it?

Rollups compress multiple off-chain transactions and send one proof to the main chain. Arbitrum ( Optimistic Rollup ) assumes that transactions are valid unless challenged. Scroll ( ZK-Rollup ) uses cryptographic proofs to confirm validity without revealing details.

Ethereum has moved towards rollups – most DeFi, gaming, and NFT activities are taking place on layer 2, which drastically lowers fees and speeds up transactions.

The Lightning Network of Bitcoin is a channel of states – participants conduct off-chain transactions, and the blockchain only records the opening and closing moments. Fast, cheap, and still secure.

Will the Blockchain Trilemma Ever Be Solved?

There is no one-size-fits-all solution. Each network makes different compromises depending on its priorities.

But we are seeing progress. Ethereum is working on a modular future with rollups. Layer 1 protocols are focusing on sharding and new consensus mechanisms. Modular networks treat decentralization, security, and scalability as configurable components.

The industry will not solve the trilemma, but it will get closer to finding a balance. And that will be enough for blockchain technology to support global applications that we can only imagine today.

The blockchain trilemma remains a challenge, but it is no longer an insurmountable obstacle.