What Is the Blockchain Trilemma? Definition, Meaning, & How it Works

The blockchain trilemma describes the fundamental challenge that crypto developers face today, maximizing the three most important aspects of a blockchain: decentralization, scalability, and security. This might not sound like a difficult problem, but improving one aspect often comes with major trade-offs with one or both of the others.

The term, which was coined by Ethereum’s co-founder Vitalik Buterin, is often used incorrectly to mean that maximizing all three is impossible. New technical concepts are being developed all the time to improve one or more aspects of blockchains without sacrificing aspects of the others.

In this guide, we’ll explore the blockchain trilemma, detailing each of the three components, examining why this problem exists, and exploring its effects. Finally, we will detail the exciting potential solutions that are currently in progress and the future of the trilemma in  the blockchain industry.

What Is the Blockchain Trilemma?

The blockchain trilemma refers to the difficulty of optimizing either the scalability, security, or decentralization of a blockchain without a significant trade-off in another aspect. For many years, it was seen as a mostly unsolvable problem, leading to many projects focusing on maximizing one or two of these aspects.

The main cause of the trilemma is the decentralized structure of blockchain networks. Decentralization typically requires allowing many users to help verify transactions and secure the network. This can lead to a scalability problem because as the number of transactions that need to be verified increase, so does the difficulty of securing the network.

Bitcoin, for example, is generally considered to be extremely decentralized and secure. The result is that it is slow and costly to use compared to many other blockchains. This is mainly because Bitcoin prioritizes decentralization and security with the small size of its transaction blocks and long block times. These factors make it easier for regular people to mine BTC and secure the network, boosting decentralization and thus security.

The Bitcoin community has been embattled over this design choice for over a decade now. It came to a head in 2015, when BTC’s popularity was increasing significantly and the network struggled to meet the new demand, leading to the ‘block size war.‘

Part of the community wanted to increase the size of transaction blocks, which would increase throughput but make it harder for people to mine BTC. The other side wanted to continue to prioritize decentralization and security and look for other ways to boost throughput. The fight ended in a hard-fork, where a new version of Bitcoin called Bitcoin Cash split off and became its own blockchain with a larger block size.

Other networks, like BNB Chain and Solana, focus on vastly higher throughput and scalability over decentralization. Most of these chains only have a small number of users securing and verifying the network. This dramatically lowers fees and boosts transaction speed considerably, but it could theoretically also threaten the network’s security if even a few verifiers collude to take over the network. Proponents argue that there would be no monetary incentive to do this, but it may still be possible.

How Does the Blockchain Trilemma Work? Three Pillars Explained

An ideal blockchain would be completely decentralized, secure, and scalable with fast and cheap transactions. So far, no crypto project has been able to perfect all three, though top developers are certainly making progress. Let’s dive into our high level overview of the three pillars of the blockchain trilemma to help you understand the problem and why it’s so difficult to solve.

Decentralization

Decentralization is the main feature that separates blockchain technology from simple ledgers and databases. The idea was borne out of the 2008 financial crisis, where millions of people were made destitute by the actions of centralized parties like large banks and financial institutions.

While some of these concepts started to pop up in the 90s and early 2000s from the Cypherpunk community, a group of cryptographers, computer scientists, and cryptographers, Bitcoin was the first truly decentralized cryptocurrency. It made sure that control of the blockchain would lie in the hands of its users instead of any centralized third party. The system worked quite well until it started gaining popularity, straining the network.

Scalability

The first and most important concept of blockchain tech was always decentralization until the adoption of Bitcoin started rising drastically. The network was built so that it would be easy for anyone with even basic hardware could secure the system, but this significantly limited the amount of transactions that could be verified at once.

The result of Bitcoin’s small block size was slow and expensive transactions because users could pay extra fees to have their transactions confirmed faster, starting a bidding war over every block. New crypto projects decided to focus more on scalability, but they didn’t have any good ways to improve it without increasing block sizes and harming decentralization.

Blockchains like BNB Chain and Solana drastically cut the number of users who verify the network. This worked wonders for scalability, leading to extremely cheap and speedy transactions, though their critics argue that it makes them much less secure and decentralized.

Security

The security of a blockchain network is heavily tied to its decentralization. If a network is controlled by a small number of miners or verifiers, it would be easier to collude with each other and take over the network and use it to steal or mint new tokens.

While this kind of attack, known as a 51% attack, is extremely rare in the crypto industry, it has occurred multiple times. The primary example is Ethereum Classic (ETC), which suffered multiple 51% attacks in just a few months. The attackers were able to double spend coins, essentially allowing them to create new tokens out of nowhere.

Why Is the Blockchain Trilemma Important in Crypto?

The blockchain trilemma is generally considered the most important technical challenge in the crypto industry. It covers the three most important aspects of the technology and solving it could help boost user adoption dramatically.

Prospective crypto users like the idea of a decentralized monetary system, but they are often scared off by the high fees and slow transactions that are unfortunately common on Bitcoin and Ethereum. This seemed to come to a head in the 2020-2021 bull run, when users started pouring into newer, more scalable blockchains like Solana and BNB Chain.

Both Solana and BNB Chain had many of the same kinds of decentralized finance (DeFi) applications and games that were becoming massively popular on Ethereum. Investors realized that instead of spending $20-30 on a single transaction on ETH, they could do the same things on other chains for a few cents.

This scalability is incredibly important to keep users interested and engaged, but it’s not the only important factor to consider. It’s possible that a new blockchain that focuses on scaling over everything else may suffer a massive hack, losing users millions or even billions of dollars. This hasn’t happened with any of the largest blockchain networks yet, but if developers start to ignore decentralization and security, it become will become increasingly likely.

How the Blockchain Trilemma Is Being Solved

While there’s no perfect solution to the blockchain trilemma, developers have proposed various promising approaches to balance decentralization, scalability, and security in public networks.

These proposals fall into two main categories: Layer 1 solutions and Layer 2 solutions. The difference lies in whether the changes are applied directly to the underlying architecture of the blockchain (Layer 1) or built on top of (or alongside) the existing network (Layer 2).

Layer 1 solutions include improvements to core components of the network like the consensus protocol. The prime example is Ethereum’s transition from Proof-of-Work to Proof-of-Stake, vastly reducing its energy requirements and preparing it for future scalability-focused upgrades.

One of the most exciting developments in the blockchain trilemma problem is a new technology called sharding. The idea is to divide the blockchain into smaller fragments called shards to process transactions in parallel. This makes it easier for large networks with thousands of validators or miners to process many more transactions, avoiding harming decentralization and security.

Layer 2 solutions are also quite promising. They are often small, efficient blockchains that aim to offload transactions from the main chain in batches. These batches are then validated on the main network at once, improving scalability without making it harder for users to secure the network.

The main types of Layer 2 solutions in the market today are rollups, state channels, sidechains, and mesh networks. A handful of them are already popular, including Bitcoin’s Lightning Network and Ethereum’s Optimism (OP) and Arbitrum (ARB).

None of these technologies can solve the trilemma by themselves. However, when they are all used in conjunction with one another, they represent major progress towards a truly scalable, decentralized, and secure blockchain ecosystem.

How the Blockchain Trilemma Relates to Other Crypto Concepts

Because the blockchain trilemma is so deeply tied into the industry, it is directly related to many important topics in crypto. Many of the most exciting new technologies and concepts in the space are being developed to help solve the trilemma. For example, Layer 2 concepts like zero-knowledge (ZK) rollups and optimistic rollups are playing a major role in the development of balanced blockchains.

ZK rollups and optimistic rollups are the two most popular methods that Layer 2 networks use to securely batch transactions to be verified all at once on the main chain. ZK rollups are more technical, using complex cryptographic proofs to verify large batches and submit a single proof to the main network. Optimistic rollups are simpler, allowing users to dispute incorrect blocks with fraud proofs.

Block size is another central concept in the crypto world that is heavily connected with the blockchain trilemma. It simply describes the amount of transactions that can be verified in a single block. Bitcoin’s block size of 1MB is very small, making it easier to secure the network, which slows transactions down and increases fees. Bitcoin Cash is mostly identical to Bitcoin but with a vastly increased block size of 32 MB.

Block time is a similar factor to block size, but it isn’t discussed as often. Block time can be decreased to allow for more blocks of transactions to be verified in a given period. Like increasing block size, this can also make it harder for regular users to secure the network, potentially harming decentralization and security.

What Is the Future of the Blockchain Trilemma?

With the current pace of technological advancement, solving the blockchain trilemma may not be as impossible of a task as experts thought for many years. Real progress is being made by front-line developers working on Layer 2 networks, Ethereum upgrades, and many other exciting projects.

One day developers may be able to strike a perfect balance between the three pillars of the trilemma. In the meantime, we may have to deal with the current state of the industry, plagued by high fees, slow transactions, and security problems.

Julia Sakovich

Senior Editor, 1250 posts

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I’m a content writer and editor with extensive experience creating high-quality content across a range of industries. Currently, I serve as the Editor-in-Chief at Coinspeaker, where I lead content strategy, oversee editorial workflows, and ensure that every piece meets the highest standards. In this role, I collaborate closely with writers, researchers, and industry experts to deliver content that not only informs and educates but also sparks meaningful discussion around innovation.

Much of my work focuses on blockchain, cryptocurrencies, artificial intelligence, and software development, where I bring together editorial expertise, subject knowledge, and leadership experience to shape meaningful conversations about technology and its real-world impact. I’m particularly passionate about exploring how emerging technologies intersect with business, society, and everyday life. Whether I’m writing about decentralized finance, AI applications, or the latest in software development, my goal is always to make complex subjects accessible, relevant, and valuable to readers.

My academic background has played an important role in shaping my approach to content. I studied Intercultural Communications, PR, and Translation at Minsk State Linguistic University, and later pursued a Master’s degree in Economics and Management at the Belarusian State Economic University. The combination of linguistic, communication, and business training has given me the ability to translate complex technical and economic concepts into clear, engaging narratives for diverse audiences.

Over the years, my articles have been featured on a variety of platforms. In addition to contributing to company blogs—primarily for software development agencies—my work has appeared in well-regarded outlets such as SwissCognitive, HackerNoon, Tech Company News, and SmallBizClub, among others.