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Blockchain Trilemma Meaning

The blockchain trilemma is the idea that a blockchain network can typically optimize for only two of three properties at once: 1. Decentralization - many independent participants can validate and run the network, reducing reliance on any single entity.

2. Security - resistance to attacks, fraud, and censorship (e.g., strong finality guarantees, economic cost to attack). 3.

Scalability - the ability to process high transaction volumes quickly and cheaply. The tension comes from trade-offs in network design.

For example, increasing throughput by using larger blocks or fewer validators can improve scalability-but may raise hardware requirements, reducing decentralization. Conversely, maximizing decentralization (low hardware requirements, many validators) can limit throughput and raise fees.

Different ecosystems choose different compromises:

Some prioritize security + decentralization, scaling via Layer 2 systems.
Others prioritize scalability, often accepting more validator concentration or stronger coordination assumptions.

Many modern architectures attempt to “cheat” the trilemma through modular design-splitting responsibilities like execution, settlement, and data availability across layers-so the base layer remains secure and decentralized while scaling occurs elsewhere.

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Finery Markets BVI Limited (“Finery Markets”) provides software, technology infrastructure, and related Information and Communication Technology (ICT) services on a Software-as-a-Service (“SaaS”) basis. Finery Markets acts solely as a software vendor and does not operate a trading platform, does not intermediate, match, execute, clear, or settle transactions, and does not engage in any activities that would require regulatory authorisation under applicable laws.

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