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Scalability Trilemma Meaning

The Scalability Trilemma is a concept proposed by Vitalik Buterin which suggests that it is virtually impossible for a blockchain to achieve all three of the following properties at the same time: Decentralization, Security, and Scalability. Most blockchain designs are forced to sacrifice one of these pillars to excel in the other two.A network like Bitcoin is highly decentralized (thousands of nodes) and highly secure (immense hashrate), but it is not scalable (7 TPS).

A centralized network (like a single server database) is highly scalable and can be secure, but it is not decentralized. High-throughput blockchains often sacrifice decentralization by requiring expensive, high-end servers to run a node, which means only a few large players can participate in the consensus process.Solving the Trilemma is the primary focus of modern blockchain research.

The industry's current Best Guess at a solution is a Modular Architecture. Instead of one chain doing everything, the network is split: one layer handles security and decentralization (the L1), while another layer handles scalability (the L2 rollups).

This allows the system to achieve Effective Scalability for the user while the underlying Proof remains anchored in a slow, but extremely secure and decentralized, base layer.

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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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