Blockchain Trilemma - Crypto Academy / S5W2 - Homework post for nane15

Good day, crypto enthusiasts!We are in week 2 of Steemit Crypto Academy season 5, and professor @nane15 is here with an exciting lecture about blockchain technology. I have read the presentation to the best of my understanding, and this is my entry for the homework task assigned after the lecture. Let's get started.

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Explain in your own words what the Blockchain Trilemma is ?

The emergence of blockchain technology has indeed brought a significant transformation in so many activities. It has made the exchange of monetary values and information very transparent and secure through the use of a public ledger (blockchain), which is made up of distributed nodes across the globe. Through the blockchain network, we are now able to do many things both online and offline in a decentralized manner without the involvement of any intermediary or centralized authority. The blockchain has proved to be a more efficient and less costly way of distributing information across the world. The major usecase of the blockchain technology is the use of cryptocurrencies. This has brought decemtralization to the financial world.

Just like any other thing in the world, the blockchain technology also faces some challenges when it comes to how they store, execute, or process data. If these problems are solved completely, I believe the blockchain will face mainstream adoption across the world and people will divert their attention from the centralized way of handling data to embrace the blockchain network. Although the blockchain technology has been seen to be growing faster and faster everyday, There are currently three main characteristics of the blockchain network. The three characteristics together raise the issue of the "blockchain trilemma." They include scalability, decentralization, and security, and they are made up of the blockchain trilemma. This idea of the blockchain trilimma was conceived by Ethereum founder, Vitalik Buterin. The term refers to how difficult it is for a single network to exhibit all three main characteristics at the same time.

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The Bitcoin and the Ethereum network are currently the most popular blockchain networks and both tend to solve some of these issues with the use of different technologies. With regards to the Bitcoin network, the use of Proof of Work (PoW) has made it a very secured and decentralized network, and it will be very difficult for the network to solve the issue of the blockchain trilemma as it lacks one of the core challenges, and that is scalability. Scalability is a very pressing issue as far as the Bitcoin network is concerned due to the POW consensus mechanism being used, as miners have to complete complex challenges before a block is validated.

As in the Bitcoin network, the Proof of Stake consensus mechanism reduces scalability issues, though it is not all that scalable. Another important part of the Blockchain trilemma that tends to be a challenge for most POS networks is decentralization, as the use of the POS consensus mechanism only gives power to some selected high stakers to serve as validators who verify transactions.

Newer blockchains have been emerging and most of them are committed to solving these challenges through the use of different technologies. They use different consensus mechanisms, and the majority of them usually end up lagging on a particular challenge.

They find it difficult to maximize the three main challenges simultaneously without sacrificing one for another. Examples of such networks that are committed to solving the issue of the blockchain trilimma include the Polcadot Network, Cardano Network, Solana Network, and many other networks. Most of these networks are highly scalable and can perform a bunch of transactions in a second, but taking a closer look at their operations, they may usually end up sacrificing one of the characteristics for scalability.

They employ different ideas day in and day out to solve these issues, but taking a look at their current state, I don't think these issues have been resolved. They still need more development to overcome them. I strongly believe there are diligent project teams out there working tirelessly to come up with newer ideas to tackle this.

Is the Blockchain Trilemma Really a Trilemma?

Trilema: three things are regarded as trilema if they have been proven to be very difficult to occur concurrently. There is still more room for improvement in the blockchain network. With blockchain networks emerging, most of them are really close to overcoming the challenges with regards to collectively applying the three main characteristics to their networks. There has been no proven fact to support the blockchain trilemma concept.

I strongly believe that, the blockchain trillemma is something solvable, even though no current blockchain network has fully succeeded in this. I strongly believe it is just a formulated term to indicate the importance of those three main characteristics and how difficult it seems to be for them to operate together cocurrently.

Define the following concepts in your own words: A. Decentralization B. Scalability C. Blockchain Security

Decentralization

Decentralization is the core mandate on which the blockchain network is built. Decentrlization diverts the decision making point from a central authority to the distributed networks of the blockchain. Decentralization has made everything on the blockchain transparent and secure. Blocks are generated for the transfer of assets among peers without the intefeerance of any public entity.

The blockchain is a public ledger, and all nodes that are connected to the network have the historical data of that particular blockchain. All the interconnected nodes serve as reference points to one another. If a single node encounters an error in its data, the rest of the nodes can be used to correct the error. This makes it impossible for any node to alter its data. The speed of transactions or validation of blocks is usually dependent on the number of nodes that validate the blocks. If the number is higher, it will take a longer time to reach a consensus than if the number is lower. The various blockchain networks employ mechanisms that facilitate decentralization in the network. They are called consensus mechanisms, and the block validation is dependent on the concensus mechanism being used. In the Bitcoin network, they use the Proof of Work Concensus mechanism to verify and generate blocks.

With the POW, a block is validated if a miner completes a complex problem. The blocks generated are then used for transactions. The POS, on the other hand, has selected members they call validators. The validators represent the highest stakeholders in the network, and they are those who vote to confirm the generation of blocks. Both consensus mechanisms contribute to network decentralization, but when we compare how strong the level of decentralization is, it is clear that the Bitcoin network, which uses the POW consensus mechanism, is more scalable than the Ethereum network, which uses the POS consensus mechanism.

Scalability

Scalability is a very important aspect of blockchain technology. The scalability of a network is the performance of the network's speed when it comes to verifying transactions. A very scalable network has a higher number of transactions per second. The scalability of a network is usually dependent on the consensus mechanism being used and the number of nodes that are required to validate blocks.

The bitcoin network's proof of work takes about 10 minutes to verify a block, which means it can only perform about 6 transactions per second, while there are proof of stake blockchains that can produce over 1000 transactions per second. Most of the blockchain networks usually sacrifice decentralization for scalable transactions. The EOS network is a clear example of this trilema. It can confirm over 4,000 transactions in a second and they even plan an upgrade that can make it possible to confirm millions of transactions, but the issue is that the network focuses less on the decentralization aspect to increase its scalability.

Security

The security of a blockvhain network refers to how prone the network is to attacks. There have been a lot of hack scandals in the crypto space, and they are all due to a lack of security in some of the networks. Security is very important in the blockchain and should be given the utmost attention in all blockchain projects. Security is mostly dependent on the coding of the project and the consensus mechanism being used. There are numerous examples of blockchain fraud that have occurred as a result of source code manipulation, indicating that a project's source code should be kept confidential to avoid it being manipulated.The various blockchain networks also use the consensus mechanisms to determine how blocks are validated. The blockchain technology is well known for its high security. For instance, in the Bitcoin network, before a hacker is able to manipulate data, he has to get 51% validation from other nodes, which is extremely difficult to achieve. Other networks trade security for scalability and decentralization, which you know now is a very dangerous venture.

Based on your knowledge, explain at least two viable solutions to the challenges posed by the Blockchain Trilemma

According to the lecture, professor Nane15 described layer 1 and layer 2 as the current approaches to resolving the blockchain trilemma challenge.I strongly believe if those two approaches (thus, layer 1 and layer 2 solutions) are implemented deligently, the issue of the blockchain trilemma will come to pass.

Layer One offers solutions that intend to improve the state of the main blockchain in order to be able to scale faster, with higher security under a decentralized network. Some of the methods being used by the layer one solutions include:

Improving the consensus mechanism. The three earlier blockchains, Bitcoin, Ethereum, and Litecoin, use the proof of work mechanism. They are perfectly decentralized and secured. The issue here has to do with scalability. I strongly believe that if they all improve from the POW to POS, where validators on the network are selected based on their stake and contribution to the network, instead of validating through mining, it will help solve the issue of scalability and maintain the security and decentralization. The Ethereum network has started this approach and they are now upgrading to Ethereum 2.0, which employs the POS consensus mechanism. This will bring scalable transactions to the network while maintaining the security and decentralization.

Sharding, is also another way to solve the issue of blockchain trilema. It involves partitioning the blockchain into shards, to handle transactions separately but in a distributed manner. This approach will help increase scalability without affecting security and decentralization.

The layer two solutions involve creating child networks on top of the main one in order to help solve the problems faced by the parent blockchain. The approaches under the layer two solutions include:

Nesting the networks hirachycally in a parent-child relationship, this will instigate the transfer of work from the main blockchain to the child chains in order to reduce the pressure on the main chain for more scalability, decentralization, and security.

Building sidechains adjacent to the mainchains could also help solve the problem of the blockchain trilemma. The transactions on the sidechains will remain public to the public and they will be used to validate transactions.They should be made in such a way that, if there is a security breach in a sidechain, it will not have a major impact on the main chain. The main chain will be focused on security and decentralization.

Building off-chain channels which are able to communicate with the main chain will also help solve this problem. as it will reduce the load on the main blockchain.

Conclusion

I strongly believe that, the blockchain trilemma will become something of the past as new projects keep on emerging with the main mandate of solving the challenges that the earlier blockchains couldn't. The Ethereum foundation has been hard on this, as they are yet to launch the mainnet of Ethereum 2.0, which intends to solve the blockchain trilemma. Solana, Polkado, Cardano, and other emerging blockchain networks are also doing very well at correcting the little flops they may have encountered in the process of solving this trilemma. Thank you for your time.