What is the impossible triad of Blockchain?
In economics, there is a trio of impossibility that cannot simultaneously implement three policies at the same time: fixed exchange rate regime, independent monetary policy to stabilize prices and self due to capital circulation. Only two of these policies can be done. This term refers to the fragility of a nation that deliberately enforces these three policies at the same time.
In the Blockchain industry, there are also such an impossible trio including Scalability, Security and Decentralization. A Blockchain only accomplishes 2 of these 3 features.
There are practical examples of this trilemma. When the average transaction fee for virtual currency bitcoin increases steadily, there will be questions regarding Bitcoin’s scalability.
Similarly, the scalability issues of Ethereum are well established when CryptoKitties (games built on Etherium’s blockchain platform) slow down the entire Ethereum network. Scalability, in the context of the current blockchain system architecture, is reviewed in parallel with the idea of security decentralization and upgrading.
Decentralization is a must-have attribute for all existing Blockchain. The hierarchy can censor and allow anyone to participate in a decentralized ecosystem without affecting the system.
Scalability (Scalability) involves the ability to handle transactions on any particular network. If the public blockchain (such as Bitcoin and Ethereum) does not limit the audience and number of users, then certain systems must be set up to handle platform situations with millions of internet users participating.
Security issues related to ensuring system security. The minimum average resistance of Blockchain to be achieved is to resist attacks such as Sybil attacks, DDoS attacks, etc.
Currently, blockchain like Bitcoin and Ethereum are designed to focus on decentralization and security. On the other hand, both blockchain have extremely slow transaction processing time because all nodes on the corresponding blockchain must reach consensus before the transaction can be processed. Because of both these problems, it has caused a cost effect on the scalability of the system.
Ethereum can handle about 15 transactions per second, while Bitcoin can only handle about 7 transactions per second. However, both numbers are much smaller than VISA payment services with the ability to handle up to 24,000 transactions per second. Even the proposals to solve the blockchain’s scalability have once again become deadlocked, dilemma.
As for Ripple’s Blockchain, they prioritize security and scalability, the Ripple Blockchain provides better customization and control capabilities, deciding who will join the network. That means there will be plenty of resources to ensure network safety. Therefore, Ripple’s Blockchain has better scalability of Bitcoin or Ethereum. In fact, this blockchain can help corporations store information in the nodes they trust.Tags: blockchain, Decentralization, Etherium