What is the Blockchain Trilemma and Why is it Hard to Solve?

Echo Team
Echo Team
05/30/20258 min read
the blockchain trilemma

Most blockchains run into a painful trade-off between three core qualities: scalability, security, and decentralization. That’s what we call the “blockchain trilemma.”

A quick refresher from our blockchain basics guide: a blockchain is a digital ledger that records transactions across a distributed network, kind of like a global accounting notebook that no one fully controls. 

The trilemma shapes everything from how blockchain projects are architected to their long-term sustainability and investability. 

Historically, platforms that prioritize security and decentralization often end up being slow and expensive, while those that lean into scalability may sacrifice decentralization, exposing users to censorship or centralized control.

Let’s dive into what the blockchain trilemma really means, why it’s such a thorny problem, and how you can assess which projects are solving it wisely, as well as how to distinguish between those that genuinely address the issue and those that merely use good branding to sell hot air.

Understanding the Blockchain Trilemma

The blockchain trilemma is a concept first coined by Ethereum’s co-founder, Vitalik Buterin

Simply put, it proposes that a blockchain can only optimize for two of the following three attributes:

  1. Security: Ensuring the network is resistant to attacks and fraud.
  2. Decentralization: Removing single points of control to maintain neutrality and censorship-resistance.
  3. Scalability: The network’s ability to handle many transactions quickly and cost-effectively.

It’s like a restaurant menu that only lets you pick two out of price, quality, and speed. 

Want fast and cheap? Expect to sacrifice on quality. Same idea.

This trade-off may seem inconvenient, but it’s baked into the architecture of how trust, consensus, and transaction processing works on distributed ledgers.

The Three Core Pillars: Security, Scalability, and Decentralization

The blockchain trilemma hinges on three competing goals. In theory, you want all three. In practice, most projects can’t have them all at once, at least not without compromise.

Security is about protecting the network from attacks. Blockchains like Bitcoin achieve this through a proof-of-work consensus mechanism and economic incentives. 

Network nodes compete to confirm valid blocks, which is costly and time-consuming, but it’s also robust and battle-tested. 

This is the practical tradeoff behind all the blockchain jargon. Every design decision affects how fast, safe, or decentralized the system can be.

Scalability refers to throughput: how many transactions a blockchain can handle per second. 

Bitcoin manages around 7 TPS (transactions per second), while Visa handles over 24,000 TPS. 

That’s a massive gap, and one of the central criticisms of early blockchains.

Newer blockchains like Solana and BNB Chain boast high throughput, upwards of tens of thousands of TPS in ideal conditions. But they achieve this by limiting who can run validator nodes, often requiring expensive hardware or relying on a smaller group of trusted actors. 

That speed comes at the cost of decentralization.

Decentralization means that no single party owns or controls the network. 

Decisions are distributed across thousands of nodes worldwide, which is great for transparency and resilience but often slows things down.

The Bitcoin Trilemma in Motion: Bitcoin vs. Solana

Take two very different chains: Bitcoin and Solana, for example. 

Bitcoin is slow and deliberately conservative, with thousands of nodes validating every block. 

Bitcoin has never experienced a full network outage or downtime, unlike centralized systems or some newer blockchains. Still, it only handles just ~7 transactions per second, making it poorly suited for high-speed or high-volume applications.

Solana, on the other hand, prioritizes speed and scalability. It uses things like Proof of History and parallel execution to process tens of thousands of transactions per second. But to achieve that, it relies on fewer, more powerful validators, which introduces centralization risks and a track record of instability.

Since 2021, Solana has faced multiple network outages, including a 17-hour halt in September 2021 caused by transaction overload, and a 7-hour outage in May 2022 due to a consensus bug. In several cases, the network required manual restarts coordinated by core developers, raising questions about decentralization. 

One leans into resilience and neutrality, while the other focuses on performance and usability. They’re solving different problems, and making different tradeoffs.

The Tradeoffs of the Bitcoin Trilemma 

Now, here’s where it gets difficult: pushing too hard in one direction typically weakens the others. 

Increase scalability dramatically? You might be forcing validators to centralize into larger data centers. 

Focus only on decentralization? You might lose performance and throughput. 

Lock down security? That often means adding time and cost.

Why Solving the Blockchain Trilemma is So Difficult

In traditional finance, you have master switches: central banks, regulators, and oversight. 

In blockchain, it’s code and math, and a surprisingly political game of how power gets distributed.

For example, improving scalability with techniques like bigger block sizes puts more pressure on the hardware running the network. That excludes smaller players and encourages centralization.

For example, Bitcoin deliberately keeps block sizes small, even at the expense of speed, to ensure that anyone with a laptop, not just a corporate server room, can run a validator. 

This tension came to a head during the infamous Bitcoin Cash ($BCH) split in 2017. One side wanted to increase block size to improve scalability. The other insisted that doing so would compromise decentralization by favoring industrial-scale miners. 

The result was a messy hard fork, resulting in two competing chains (Bitcoin and Bitcoin Cash), each representing different priorities in the trilemma.

Ethereum’s move toward proof-of-stake with Ethereum 2.0 aims for better scalability, but it’s sparked debates about whether staking pools become too influential.

Today’s staking landscape, for example, is dominated by platforms like Lido, Coinbase, and Binance, which collectively control a large chunk of Ethereum’s staked $ETH. Combined, these three entities manage nearly 51% of Ethereum’s staked $ETH.

(Source: Dune Analytics)

While staking services simplify participation and boosts scalability, critics argue that these dominant pools introduce new forms of centralized influence. If just a few actors can steer consensus or censor transactions, then the network’s decentralization, and by extension, its neutrality, starts to erode.

Then there’s security. If you open up throughput pipes too aggressively or put too much trust in Layer 2 processing, you risk weakening the consensus model. 

No investor wants to wake up to another $300 million hack because a fancy new bridge skipped auditing.

In short: optimizing for any one leg of the triangle stretches the fabric of the others, and that’s not just technical, it’s economic and political.

Case Studies: How Different Blockchains Prioritize the Blockchain Trilemma

Let’s look at how different blockchains fall across this triangle.

Bitcoin nails security and decentralization. Its consensus mechanism is notoriously rugged, with miners distributed globally. But it lacks on scalability. A Bitcoin transaction can take minutes and cost several dollars when demand spikes.

To address these limitations, solutions like the Lightning Network, a Bitcoin payments Layer 2 protocol, have been developed. The Lightning Network facilitates faster, low-cost transactions by enabling off-chain payment channels. 

Additionally, various third-party projects are exploring alternative scaling methods to enhance Bitcoin’s transaction throughput.

Solana flips the emphasis. It’s fast, with upwards of 60,000 TPS possible, and it’s cheap. Investors and users love the narrative of scalability. But its validator requirements are heavy-duty, which means fewer independent nodes. 

Ethereum originally weighted toward decentralization and security but has been actively re-architecting for scalability. 

Layer 2 solutions like Arbitrum and Optimism process transactions off the main chain, then roll summaries back to Ethereum’s Layer 1. It’s a complex proposition, but one that might offer a balanced middle path over time.

These network design decisions materially affect performance, adoption, and how investor capital is allocated. 

Can the Blockchain Trilemma Be Solved?

Maybe. Depending on how fluid your definition of “solve” is.

For example, Layer 2 scaling solutions like Optimism offer some rays of hope, processing transactions quickly off-chain, then anchoring them to a more secure Layer 1. Sharding, a concept Ethereum is moving toward, breaks the blockchain into smaller chunks to increase speed. 

Other approaches, such as Avalanche’s subnet architecture and Near Protocol’s Nightshade, attempt parallel processing while preserving validator integrity.

Yet none of these approaches are mature enough to declare victory. It’s more realistic to say the trilemma can be “mitigated” through architectural gymnastics and clever consensus protocols, not “solved” outright.

The good news for investors is that this engineering arms race toward better trade-offs means constant innovation, and that means opportunity.

Final Thoughts: Blockchain Trilemma and What It Means for You

The blockchain trilemma is an invisible force that shapes every major decision in crypto infrastructure. 

Whether you’re evaluating a new protocol or making a blockchain investment, understanding how projects juggle scalability, security, and decentralization gives you an edge, or at least an intimate awareness of foundational risk factors. 

It affects transaction costs, network reliability, validator incentives, and whether a chain can realistically scale to millions of users without collapsing into centralization theater.

Some projects embrace the trilemma and design around it with transparency. Others hide behind buzzwords, hoping users won’t notice the shortcuts. Smart investors and builders spot the difference.

The best way to navigate this landscape is to stay trilemma-literate. Know which leg of the triangle a project leans on, and what that means in moments of stress, growth, or regulatory scrutiny.

The chains that win in the long term won’t be the ones that claim to solve the trilemma. They’ll be the ones that manage it well enough and make trade-offs you can live with.