1) Security: Can the blockchain be secure against attacks?
2) Scalability: Can the blockchain scale to support large numbers of users and transactions?
3) Decentralization: Can the blockchain be decentralized so that no single entity has control over it?
The blockchain trilemma is often referred to as the “scalability vs. security vs. decentralization” trilemma.
Where blockchain technology currently lies, it is thought that you can only have two of the three done well. For example, Bitcoin is very secure and decentralized but it is not scalable. Ethereum is more scalable than Bitcoin but it is not as secure.
The question then arises, do all three need to be achieved? Are security and scalability enough? Or is decentralization the most important factor?
Projects will typically choose the two elements that are most important to them. For example, a project may choose security and decentralization over scalability. This decision will typically come down to the use case of the blockchain.
For example, a blockchain that is being used to track medical records may place a higher importance on security while a blockchain that is being used for a new payments system may place a higher importance on scalability.
The blockchain trilemma is an ongoing challenge that blockchain technology faces. As the technology evolves, we may see new solutions that allow for all three to be achieved, but as it currently stands there is no perfect solution.