Solving the Blockchain Trilemma

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The blockchain is a revolutionary technology. During the first decade of the blockchain, one of the main challenges was the so-called "Blockchain Trilemma," which states that the three key objectives, security, scalability, and decentralization, could not be fully achieved without sacrificing at least one.

  • Security: Security is simply resisting external attacks on the network. There are numerous known vulnerabilities and different ways of responding or acting.

  • Scalability: Scalability is measured by how many users the network can support and the ability to handle several transactions by many platform users.

  • Decentralization: Nodes are distributed in different locations, preferably unknown to each other, to achieve decentralization. This factor focuses on the ability to delegate responsibilities among the participants.

Being a decentralized system, users have a voice and vote or participate within the network. In contrast, in more centralized systems, decisions are made by a selected committee or a person directing the project, sometimes taking actions contrary to the users.

There are different algorithms for Proof-of-Stake, some more decentralized than others, such as Algorand's Pure PoS.

Solutions to the Trilemma

Algorand has managed to find a method that solves the trilemma without sacrifices. Algorand's founder and MIT professor Silvio Micali invented the solution.

Algorand combines its powerful PoS with a private lottery system, supporting over a thousand transactions per second without taking up much processing on the network. It also has a model of smart contracts where everything is executed on a single layer of the Blockchain, thus, making the process very fast and secure. The only way to harm Algorand's network is to achieve a self-defeating majority of token holders, which is impossible in practice because no one is interested in losing their investments.

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