Blockchain is a technology that has emerged partly to provide greater freedom and fluidity in managing money. Moreover, it acts as a technology that accelerates the exchange of information and valuable assets between participants in a process, eliminating the dependence on intermediaries.
As for the characteristics of Blockchain technology, we could highlight three:
- Immutable and shared: It only allows information to be added. Therefore, it is a record of information that cannot be modified. In addition, an identical copy of the information is distributed to all participants.
- Decentralised and scalable: There is no central operator, which makes it highly reliable as there is no single point of failure or attack. In addition, participants are organised by common consensus to validate stored information. Moreover, it has the ability to grow naturally, so the platform’s power can grow progressively and based on demand.
- Secure and robust: blockchain technology uses cryptography to store information, which makes it immune to fraud. It is also worth mentioning that it draws on increased computational power by combining the computing power of all connected computers.
What is this trilemma about?
However, there is a problem linked to this technology: the so-called Blockchain Trilemma, a term coined by Vitalik Buterin. It consists of any developer having to sacrifice one of these characteristics to make room for the other two:
In the blockchain, scalability refers to how large a network can expand in the future while maintaining the current transaction speed and performance level. When scalability and decentralisation operate together, security suffers because security prevents innovations that would allow the decentralised network to scale. This occurs because decentralised networks are difficult to scale since they require much effort to operate.
Blockchain networks are not entirely secure, as a hacker can modify a blockchain and manipulate transactions if he gains control of more than half of the network (51%). Therefore, the more nodes there are in a blockchain, the more secure it is.