If it wasn't obvious by now, blockchain protocols are becoming increasingly popular due to their decentralized and robust nature. However, to address the challenges blockchain engineers face, it's important to understand the fundamental and inherent problems the technology has.

Blockchain projects are known for their vision and ambition — but what they prioritize and what they’re known for can vary. Normally, projects rotate around three core concepts: decentralization, scalability, and security.

And while we can argue that the whole industry evolved from the primitive concepts, fundamental challenges remain the same.

The term blockchain trilemma was firstly introduced by Vitalik Buterin in order to point up to the problems developers face in creating a blockchain that is scalable, secure, and decentralized - Without having to sacrifice on any facet. It's more like a model in which you can conceptualize the main issues, and visualize how it's all connected. Apparently, there's no perfect system out there, yet.

There's a problem though, most, if not all of the projects had to make a trade-off, preventing them to reach all three propositions.

• Security - The ability of the blockchain system to operate in an expected way, defend itself from malicious actors, bugs, and similar issues.
• Decentralization - The system in which there's no one point of failure, meaning there are more people running the nodes, thus increasing the overall security of the network.
• Scalability - The ability to handle an increase in the number of transactions, without having any issues.

Those are the three core concepts around which every dev has to operate, and while it may seem somehow easy, I assure you that shit is complicated as fuck, technically wise.

While some developers believe that the blockchain data structure itself has inherent limitations that prevent it from scaling, many architects, including CertiK, believe that it’s possible to build a blockchain project that hits all three targets: one that is scalable, decentralized, and secure.

Decentralization.

Decentralization is a core component, or at least it should be the core component of blockchain technology. It is one of the three unique value proposition blockchains has, thus deserves its spot among the stars.

In traditional finance, the system is entirely centralized and governed by a few individuals or corporations where the customers are forced to reveal their identity/financial habits and completely stay in a fucked up relationship with the law.

That's why a decentralized system matter, it empowers a permissionless economy and ownership anyone can use and build upon. Decisions are made by a consensus, meaning that transactions are approved by multiple node runners as opposed to a single entity or order book.
Once everyone agrees on the truthfulness of the transaction, the transaction is stored on the blockchain.

The trade-off of pure decentralization, however, is speed. If a transaction requires multiple confirmations before reaching consensus, then inherently, it would take longer than if a transaction can be confirmed by a single entity. Bitcoin is known to be robustly decentralized, but at the same time, pretty slow.

Those are the main principles regarding decentralization, of course, there's a lot more but I could write about it a whole day so it would be pointless.

Scalability

And while it may sound not so ideologically relevant, in terms of UX and mass adoption it plays a vital role. Imagine how frustrating can it be once the network gets overloaded. Having to wait for an hour to get a transaction validated is not something that will retain the users, especially not if we are talking about social platforms that are highly dependent on how fast and smooth it is.

I believe what Hive account@blocktrades did with HF24 was a smart thing to do. It would be terrible to have problems with scalability in case we trigger the mass adopotion.

I personally think scalability weights more value than people like to think.

Security

You can imagine how important the security of the network is, especially if we consider that money and governance rights are involved in the same equation. I mean, we have already witnessed countless vulnerabilities in source code, hacks of the exchanges, rug pulls.. You name it...
Projects that are no audited should be avoided for any cost, and while it may not be on purpose, no one will give a shit once you lose your money.

Due to the transparent nature of an open-source code and the potential lucrative outcome of the hack, crypto is becoming increasingly interesting for hackers.

While often disregarded, security is ultimately important for big investors as the loss of funds would end up as a catastrophe.

Hope you guys got an idea of how it works, if you find anything valuable feel free to give me some fat upvote. LOL.