Blockchain trilemma is a term coined by Vitalik Buterin, founder of Ethereum. It refers to the developers’ challenge to create a blockchain that is simultaneously secure, decentralized, and scalable.
One of these three vital elements often gets compromised when developing a blockchain network. For instance, a highly decentralized and secure blockchain may not be scalable, or a scalable and secure blockchain network may fall behind in decentralization.
A blockchain created to enable true decentralization could suffer challenges in scalability and throughput. On the other hand, a highly scalable blockchain will have to compromise on decentralization.
The blockchain trilemma is inherent to blockchain technology’s fundamental design and structure. According to Buterin, having two vital characteristics is impossible without compromising on the third.
However, newer third-generation blockchain networks attempt to solve the blockchain trilemma through innovation in consensus mechanisms.