Deconstructing the Decentralization Trilemma

TL;DR

This paper analyzes the decentralization trilemma in blockchain systems, categorizes architectures, and discusses social trust factors affecting decentralization, security, and scalability.

Contribution

It provides a typology of architectures and identifies seven key challenges in achieving true decentralization.

Findings

Different architectures experience the trilemma differently.

Social trust interpretations influence architecture choices.

Seven hard problems hinder full decentralization.

Abstract

The vast majority of applications at this moment rely on centralized servers to relay messages between clients, where these servers are considered trusted third-parties. With the rise of blockchain technologies over the last few years, there has been a move away from both centralized servers and traditional federated models to more decentralized peer-to-peer alternatives. However, there appears to be a trilemma between security, scalability, and decentralization in blockchain-based systems. Deconstructing this trilemma using well-known threat models, we define a typology of centralized, federated, and decentralized architectures. Each of the different architectures has this trilemma play out differently. Facing a possible decentralized future, we outline seven hard problems facing decentralization and theorize that the differences between centralized, federated, and decentralized architectures depend on differing social interpretations of trust.