Understanding Blockchain Trilemma, Causes and Solutions

Abstract

With extensive research and development in blockchain technology, the concern about scalability, security, and decentralization is still evident. Blockchain trilemma describes that it is realistically impossible to simultaneously achieve a high level of decentralization, security, and scalability. However, new developments in the sector of blockchain are making progress in simultaneous achievement of these three aspects. Layer 1 blockchain is the base level of blockchain network architecture. It includes blockchain networks like Bitcoin, Ethereum, etc. However, the Layer 1 blockchain network faces scalability issues. Layer 2 blockchain is a network built on top of Layer 1 blockchain to help eliminate scalability issues. This paper presents a comparative analysis of Layer 1 and Layer 2 blockchain networks and different approaches to solving the blockchain trilemma in Layer 1 and Layer 2 blockchain networks. From the study, we found that Layer 2 blockchain networks are easier and faster to implement.