Scalability: Blockchain Tech’s Greatest Problem

What Is Blockchain Scalability?

Blockchain scalability is the ability of a blockchain network to handle increasing workloads, participation, and use. There are many factors that can affect a blockchain’s performance, such as its decentralization, how secure it is from attacks, governance and improvement mechanics, storage requirements, hardware requirements, and much more.

However, scalability remains the main challenge for blockchain developers. Here’s why.

Key Takeaways

• Blockchain is still evolving, so many of its issues are still being worked on.
• Regarding blockchain, scalability is the ability to handle an increasing or decreasing number of transactions without sacrificing security or decentralization.
• Most blockchains sacrifice one or more of these factors to achieve their goals, but scalability remains an issue.

The Blockchain Trilemma

For a public or otherwise distributed blockchain to work efficiently, be secure, and handle all of the requests for work that can be made at the scale some blockchain projects want to achieve (global), the blockchain must be:

• Decentralized
• Secure
• Scalable

One of these factors must be sacrificed to some extent to achieve two of the others. The following image of a triangle demonstrates how each factor affects the others. For example, for higher security and scalability, decentralization must be sacrificed. For higher decentralization and security, scalability must be reduced.

Blockchain Decentralization

Decentralization is the idea of distributing a blockchain across a network rather than storing it in a centralized location. For example, over a 90-day period of Aug. 22, 2024, to Nov. 20, 2024, there was an average of more than 471,000 Bitcoin nodes globally, each running the same software and updating the blockchain. So, Bitcoin is a very decentralized blockchain, which makes it secure but not very scalable without third-party solutions.

Blockchain Security

Blockchain security refers to the ability to resist attacks or unauthorized changes. Programmable security measures taken by developers are important features for a blockchain, but decentralization makes it even more secure. The more distributed a blockchain is, the more secure it generally is. Bitcoin is a very secure blockchain because of the number of participants and the speeds at which they process data.

Blockchain Scalability

Scalability is the ability of blockchain to handle more work. The overarching goal for achieving scalability is to do so without reducing security and decentralization. On cryptocurrency blockchains, scalability translates directly to transactions per second. Because it is very decentralized and secure, the Bitcoin blockchain is not very scalable without the help of external programming. Since Bitcoin’s introduction to the public in 2009, many people have been interested in scaling the blockchain.

In 2014, a group of developers wanted to increase the size of the blocks (files) on the Bitcoin blockchain so that more transactions could be processed. The way to do this became controversial because developers couldn’t agree on the best way to do it and keep the blockchain security and decentralization intact. As a result, several blockchain forks occurred between 2014 and 2018 based on different groups’ beliefs.

Ethereum is the most used blockchain for developing applications because it is very scalable. There were more than 10 million Ethereum nodes operating on Nov. 21, 2024, making it possibly the most decentralized, secure, and scalable blockchain at the time, but it still couldn’t handle more than 15 transactions per second.

What Is the Biggest Problem With Blockchain?

Scalability has always been the number one issue regarding blockchain because to scale it, decentralization and security must be sacrificed.

What Are the Weaknesses of Blockchain?

Blockchain is often touted as being highly secure, resistant to change and alteration, and able to create more efficient systems for tracking ownership and data. However, some chains require large amounts of energy to run, and some need to be more centralized with limited access to accomplish their purposes. Some use cases, such as decentralized payment systems, rely on large networks of participants and adoption for security, which decreases scalability.

What Are the Challenges of Blockchain?

Private, permissioned blockchains are generally easier for organizations to implement and secure. Public, permissionless blockchains need to be adopted by many participants to be secure and fast. Even then, many are not able to process the amount of data being generated, such as the growing number of transactions on payment networks.

The Bottom Line

Blockchain is not a new technology, as it has been under development since the 1990s. Cryptographers, programmers, data scientists, and many others have all been working to create this transformative technology and overcome the primary concerns of scalability, decentralization, and security. A few projects seem to have overcome some of these obstacles, but sacrificing one for others remains challenging.