Bitcoin

Ethereum

Memetic / PepeCoin

Aragon

FTX Token

Pepe

If you&#39;re one of the many users of Bitcoin and Ethereum networks, you might have noticed that things have been getting congested lately. With high network fees and transactions getting stuck as pending, it&#39;s becoming increasingly frustrating to send and receive funds.While the promise of decentralized, trustless payments is tantalizing, the reality of blockchain scalability is becoming increasingly apparent.Blockchain technology has always struggled with the issue of scaling. As more users enter the network and transactions increase, the system becomes congested, leading to delays and high fees. This problem is especially pronounced in Bitcoin and Ethereum, two of the largest and most popular blockchain networks.The fundamental question is: How can blockchain networks scale to accommodate millions, or even billions, of users while maintaining their core values of decentralization and security?This question  leads to the subject of the <a href="https://defi-planet.com/2022/02/what-is-the-blockchain-trilemma/" rel="noopener noreferrer nofollow">blockchain trilemma</a> which refers to the three fundamental aspects of blockchain technology that often conflict with each other: decentralization, security, and scalability.Achieving a high level of decentralization, security, and scalability at the same time is difficult because improving one aspect may come at the expense of another. This newsletter focuses on the scalability aspect of the blockchain trilemma.Scalability refers to a blockchain&#39;s ability to handle an increasing number of transactions as the network grows. In other words, scalability is the ability of a blockchain to increase its throughput and processing capacity without compromising on decentralization and security.In a traditional centralized system, scaling is relatively straightforward: adding more hardware and resources to handle increased demand.However, blockchain technology is inherently decentralized, which makes scaling more complicated. Decentralization sets blockchain apart from other types of technology, as it ensures that no single entity controls the network.Several <a href="https://defi-planet.com/2022/06/an-overview-of-blockchain-scalability-solutions/" rel="noopener noreferrer nofollow">approaches to achieving scalability in a blockchain network</a> have been proposed, each with advantages and disadvantages. Let&#39;s take a look at some of the most popular scalability solutions.<ol><li>Sharding: Sharding is a technique that involves breaking up a blockchain network into smaller pieces, or &#34;shards,&#34; each of which can process transactions independently. Sharding allows for parallel processing of transactions across multiple shards, significantly increasing the network&#39;s throughput. However, sharding can compromise the network&#39;s security and decentralization if not implemented correctly.</li><li>Layer 2 solutions: Layer 2 solutions are off-chain solutions that operate alongside the main blockchain and use the blockchain only for settlement. <a href="https://defi-planet.com/2021/10/ethereums-layer-2-solutions-a-comprehensive-guide/" rel="noopener noreferrer nofollow">Layer 2 solutions</a> include payment channels, state channels, and sidechains. These solutions reduce the number of transactions that need to be processed on the main blockchain, thus increasing the network&#39;s throughput. Layer 2 solutions are generally highly scalable but come with some trade-offs, such as reduced security.</li><li>Increased block size: Increasing the block size is a simple and effective way to increase a blockchain&#39;s throughput. However, increasing the block size also increases the size of the blockchain, making it harder for individual nodes to store and validate the blockchain. Additionally, larger blocks can also lead to longer confirmation times and higher fees.</li><li>Proof-of-Stake (PoS) consensus:  <a href="https://defi-planet.com/2021/09/a-z-of-proof-of-stake-pos-in-blockchain/" rel="noopener noreferrer nofollow">PoS</a> is a consensus mechanism that requires validators to stake a certain amount of cryptocurrency to participate in the network&#39;s consensus process. In a PoS system, validators are chosen randomly to validate transactions and add new blocks to the blockchain. PoS is more energy-efficient and scalable than Proof-of-Work (PoW) consensus mechanisms. However, PoS also comes with some trade-offs, such as reduced security.</li><li>Hybrid approaches: This entails combining multiple scalability solutions to achieve the desired level of scalability while maintaining decentralization and security. For example, a blockchain network might combine sharding and Layer 2 solutions to achieve high throughput while maintaining a high level of decentralization and security.</li></ol>Major industry stakeholders are actively working to develop innovative solutions that would crack the trilemma and unlock the full potential of blockchain technology. Until then, it&#39;s up to users and developers who use blockchain platforms for financial transactions to navigate the current limitations and push the boundaries of what&#39;s possible with decentralized finance (DeFi).Catch up on our published articles for the week!NEWS● China Proposes Protocol for Managing Financial Experiments Related to Cryptocurrencies &gt;&gt;&gt;<a href="https://defi-planet.com/2023/05/china-proposes-protocol-for-managing-financial-experiments-related-to-cryptocurrencies/" rel="noopener noreferrer nofollow"> Read more</a>.● Philippine Police Rescue Over 1,000 Individuals Forced to Operate Online Cryptocurrency Frauds&gt;&gt;<a href="https://defi-planet.com/2023/05/philippine-police-rescue-over-1000-individuals-forced-to-operate-online-cryptocurrency-frauds/" rel="noopener noreferrer nofollow"> Read more</a>.● OKX to Establish Office in Turkey as Part of Global Expansion Plans&gt;&gt;&gt;<a href="https://defi-planet.com/2023/05/okx-to-establish-office-in-turkey-as-part-of-global-expansion-plans/" rel="noopener noreferrer nofollow"> Read more</a>.● Ripple to Spend $200M on Legal Defense Against U.S. SEC&gt;&gt;&gt;<a href="https://defi-planet.com/2023/05/ripple-to-spend-200m-on-legal-defense-against-u-s-sec/" rel="noopener noreferrer nofollow"> Read more</a>.● Governor DeSantis Criticizes Central Bank Digital Currencies, Proposes Ban in Florida&gt;&gt;&gt;<a href="https://defi-planet.com/2023/05/governor-desantis-criticizes-central-bank-digital-currencies-proposes-ban-in-florida/" rel="noopener noreferrer nofollow"> Read more</a>.● More Latin American Countries Considering Bitcoin Adoption Despite Rising Transaction Fees&gt;&gt;&gt;<a href="https://defi-planet.com/2023/05/more-latin-american-countries-considering-bitcoin-adoption-despite-rising-transaction-fees/" rel="noopener noreferrer nofollow"> Read more</a>.● XRP Healthcare and the Burnratty Investment Group Appoints Whitney Lynn as Chairman&gt;&gt;&gt;<a href="https://defi-planet.com/2023/05/xrp-healthcare-and-the-burnratty-investment-group-appoints-whitney-lynn-as-chairman/" rel="noopener noreferrer nofollow"> Read more</a>.● Over 300 Virtual Asset Service Providers Forced to Shut Down in Estonia Due to New AML Laws&gt;&gt;&gt;<a href="https://defi-planet.com/2023/05/over-300-virtual-asset-service-providers-forced-to-shut-down-in-estonia-due-to-new-aml-laws/" rel="noopener noreferrer nofollow"> Read more</a>.● Crypto Industry Supporters Raise Concerns Over SEC’s Proposed Custody Regulation&gt;&gt;&gt;<a href="https://defi-planet.com/2023/05/crypto-industry-supporters-raise-concerns-over-secs-proposed-custody-regulation/" rel="noopener noreferrer nofollow"> Read more</a>.● Coinbase Pushes Back Against SEC’s Proposed Crypto Custody Regulation&gt;&gt;&gt;<a href="https://defi-planet.com/2023/05/coinbase-pushes-back-against-secs-proposed-crypto-custody-regulation/" rel="noopener noreferrer nofollow"> Read more</a>.● Goldman Sachs Survey Shows Wealthy Investors Increasingly Investing in Digital Assets and Blockchain Technology&gt;&gt;&gt;<a href="https://defi-planet.com/2023/05/goldman-sachs-survey-shows-wealthy-investors-increasingly-investing-in-digital-assets-and-blockchain-technology/" rel="noopener noreferrer nofollow"> Read more</a>.● Hong Kong Regulators Warn Crypto Businesses to Brace for Tighter Regulations&gt;&gt;&gt;<a href="https://defi-planet.com/2023/05/hong-kong-regulators-warn-crypto-businesses-to-brace-for-tighter-regulations/" rel="noopener noreferrer nofollow"> Read more</a>.● OKX Unveils Global Ad Campaign, Takes Aim at Coinbase’s Financial System Revamp Campaign&gt;&gt;&gt;<a href="https://defi-planet.com/2023/05/okx-unveils-global-ad-campaign-takes-aim-at-coinbases-financial-system-revamp-campaign/" rel="noopener noreferrer nofollow"> Read more</a>.● OKX Announces Role As Title Sponsor and Premium Partner of Blockchain Economy Istanbul Summit&gt;&gt;&gt;<a href="https://defi-planet.com/2023/05/okx-announces-role-as-title-sponsor-and-premium-partner-of-blockchain-economy-istanbul-summit/" rel="noopener noreferrer nofollow"> Read more</a>.● Aragon Association Cancels Proposal for ANT Token Voting Rights, Cites Commitment to Fiduciary Responsibility&gt;&gt;&gt;<a href="https://defi-planet.com/2023/05/aragon-association-cancels-proposal-for-ant-token-voting-rights-cites-commitment-to-fiduciary-responsibility/" rel="noopener noreferrer nofollow"> Read more</a>.● 16 Persons on Trial for Kidnapping and Stealing $1.5 Million Worth of Cryptocurrency in Vietnam&gt;&gt;&gt;<a href="https://defi-planet.com/2023/05/16-persons-on-trial-for-kidnapping-and-stealing-1-5-million-worth-of-cryptocurrency-in-vietnam/" rel="noopener noreferrer nofollow"> Read more</a>.● Crypto Community Skeptical of President Biden’s Call to Close Crypto Tax Loopholes, Demands Clarity&gt;&gt;&gt;<a href="https://defi-planet.com/2023/05/crypto-community-skeptical-of-president-bidens-call-to-close-crypto-tax-loopholes-demands-clarity/" rel="noopener noreferrer nofollow"> Read more</a>.● Ethereum Validators Earn $46 Million in a Week as Staking Rewards Soar&gt;&gt;&gt;<a href="https://defi-planet.com/2023/05/ethereum-validators-earn-46-million-in-a-week-as-staking-rewards-soar/" rel="noopener noreferrer nofollow"> Read more</a>.● UK Financial Institutions Raise Concerns Over Government’s Cryptocurrency Regulation Plans&gt;&gt;&gt;<a href="https://defi-planet.com/2023/05/uk-financial-institutions-raise-concerns-over-governments-cryptocurrency-regulation-plans/" rel="noopener noreferrer nofollow"> Read more</a>.● New York State Democrat Proposes Accepting Stablecoins for Bail Bonds&gt;&gt;&gt;<a href="https://defi-planet.com/2023/05/new-york-state-democrat-proposes-accepting-stablecoins-for-bail-bonds/" rel="noopener noreferrer nofollow"> Read more</a>.● EU Legislators Move Closer to Enacting World’s First Comprehensive AI Legislation&gt;&gt;&gt;<a href="https://defi-planet.com/2023/05/eu-legislators-move-closer-to-enacting-worlds-first-comprehensive-ai-legislation/" rel="noopener noreferrer nofollow"> Read more</a>.● Bitcoin Mining Company Receives Second SEC Subpoena for Data Center Transactions&gt;&gt;&gt;<a href="https://defi-planet.com/2023/05/bitcoin-mining-company-receives-second-sec-subpoena-for-data-center-transactions/" rel="noopener noreferrer nofollow"> Read more</a>.● China Launches National Blockchain Technology Innovation Center to Drive Blockchain Development&gt;&gt;&gt;<a href="https://defi-planet.com/2023/05/china-launches-national-blockchain-technology-innovation-center-to-drive-blockchain-development/" rel="noopener noreferrer nofollow"> Read more</a>.● United States IRS Demands $44 Billion in Back Taxes from Alameda Research, FTX, and Affiliates&gt;&gt;&gt;<a href="https://defi-planet.com/2023/05/united-states-irs-demands-44-billion-in-back-taxes-from-alameda-research-ftx-and-affiliates/" rel="noopener noreferrer nofollow"> Read more</a>.● Do Kwon Pleads Not Guilty to Traveling With Fake Documents in Montenegro&gt;&gt;&gt;<a href="https://defi-planet.com/2023/05/do-kwon-pleads-not-guilty-to-traveling-with-fake-documents-in-montenegro/" rel="noopener noreferrer nofollow"> Read more</a>.● Binance.US CEO Explores Options to Reduce Ownership Stake Amidst Ongoing Legal Challenges&gt;&gt;&gt;<a href="https://defi-planet.com/2023/05/binance-us-ceo-explores-options-to-reduce-ownership-stake-amidst-ongoing-legal-challenges/" rel="noopener noreferrer nofollow"> Read more</a>.● Former FTX Compliance Chief Joins Lawsuit Against Celebrities Over Alleged Promotion of Bankrupt Crypto Exchange&gt;&gt;&gt;<a href="https://defi-planet.com/2023/05/former-ftx-compliance-chief-joins-lawsuit-against-celebrities-over-alleged-promotion-of-bankrupt-crypto-exchange/" rel="noopener noreferrer nofollow"> Read more</a>.● Lufthansa and Eurowings Embrace Web3 Technologies to Drive Innovation in Travel Industry&gt;&gt;&gt;<a href="https://defi-planet.com/2023/05/lufthansa-and-eurowings-embrace-web3-technologies-to-drive-innovation-in-travel-industry/" rel="noopener noreferrer nofollow"> Read more</a>.● Texas Moves to Include Protection for Use of Digital Currencies in State Bill of Rights&gt;&gt;&gt;<a href="https://defi-planet.com/2023/05/texas-moves-to-include-protection-for-use-of-digital-currencies-in-state-bill-of-rights/" rel="noopener noreferrer nofollow"> Read more</a>.● Montenegrin Court Approves Bail for Do Kwon on Document Forgery Charges&gt;&gt;&gt;<a href="https://defi-planet.com/2023/05/montenegrin-court-approves-bail-for-do-kwon-on-document-forgery-charges/" rel="noopener noreferrer nofollow"> Read more</a>.● Romanian Government Embraces AI, Adopts AI-Powered Robot “Ion” to Tackle Societal Challenges&gt;&gt;&gt;<a href="https://defi-planet.com/2023/05/romanian-government-embraces-ai-adopts-ai-powered-robot-ion-to-tackle-societal-challenges/" rel="noopener noreferrer nofollow"> Read more</a>.● U.S. SEC Penalizes HSBC Securities and Scotia Capital for Breaching Recordkeeping Rules&gt;&gt;&gt;<a href="https://defi-planet.com/2023/05/u-s-sec-penalizes-hsbc-securities-and-scotia-capital-for-breaching-recordkeeping-rules/" rel="noopener noreferrer nofollow"> Read more</a>.ARTICLES● Introducing Gnosis: An Ethereum-Based Decentralized Prediction Market: This article provides a comprehensive overview of Gnosis, including its features, how it operates, and its potential for the future. &gt;&gt;&gt;<a href="https://defi-planet.com/2023/05/introducing-gnosis-an-ethereum-based-decentralized-prediction-market/" rel="noopener noreferrer nofollow"> Learn more.</a>MARKETS●Pepe Coin Makes Impressive Market Debut, Surpasses Shiba Inu and Dogecoin in Market Capitalization &gt;&gt;&gt;<a href="https://defi-planet.com/2023/05/pepe-coin-makes-impressive-market-debut-surpasses-shiba-inu-and-dogecoin-in-market-capitalization/" rel="noopener noreferrer nofollow"> Learn more.</a><h4>ICYMI…</h4>Governor DeSantis Signs Bill Prohibiting Use of CBDCs in FloridaA central bank digital currency (CBDC) is a digital form of a country&#39;s fiat currency that is issued and backed by its central bank. It can be used for peer-to-peer transactions, online purchases, and other digital transactions. CBDCs are designed to be more secure, efficient, and cost-effective than physical cash.<a href="https://defi-planet.com/2022/03/cbdcs-explained/" rel="noopener noreferrer nofollow">CBDCs</a> have been a topic of discussion among policymakers and financial experts in recent years. Some proponents argue that CBDCs could help improve financial inclusion, reduce transaction costs, and increase transparency. However, others are wary of the potential risks associated with CBDCs, such as privacy concerns, cybersecurity risks, and the potential for central banks to exert greater control over the financial system.In the case of Florida&#39;s new law, Governor DeSantis signed a bill that restricts the use of CBDCs in the state, including U.S. federal CBDCs and those issued by foreign governments. The law prohibits the use of CBDCs as money within Florida&#39;s Uniform Commercial Code (UCC) and calls on other states to do the same. The decision to enact this law was reportedly influenced by studies conducted by the White House on the use of CBDCs in the financial system.The reasons behind Florida&#39;s decision to restrict the use of CBDCs are not entirely clear, but some experts suggest that it may be related to concerns over the potential risks associated with CBDCs, such as the potential for increased government surveillance and control over financial transactions. Others argue that the decision is largely symbolic and may not significantly impact the development and adoption of CBDCs.Spotlight on interesting projectsBetDEXThe <a href="https://www.betdex.com/" rel="noopener noreferrer nofollow">BetDEX Exchange</a> is a sports betting exchange built on the Monaco Protocol, allowing for peer-to-peer wagering.The Exchange is licensed and regulated under the jurisdiction of the Isle of Man via the Gambling Supervision Commission. BetDEX is a key contributor to the Monaco Protocol, a permissionless decentralized and open-sourced protocol built on the Solana blockchain, supporting prediction and betting markets.For more information, visit <a href="https://www.betdex.com/" rel="noopener noreferrer nofollow">https://www.betdex.com/</a>.<img src="https://academy-public.coinmarketcap.com/srd-optimized-uploads/be43c2b1bd964fcd862c753011018f5d.png" />If you want more content like this, visit <a href="https://defi-planet.com/" rel="noopener noreferrer nofollow">DeFi Planet</a> and follow us on <a href="https://twitter.com/PlanetDefi" rel="noopener noreferrer nofollow">Twitter</a>, <a href="https://www.linkedin.com/company/defi-planet/" rel="noopener noreferrer nofollow">LinkedIn</a>, <a href="https://www.facebook.com/DeFi-Planet-129907662611402" rel="noopener noreferrer nofollow">Facebook</a>, <a href="https://www.instagram.com/defi.planet/" rel="noopener noreferrer nofollow">Instagram</a>, <a href="https://medium.com/&#64;defi-planet" rel="noopener noreferrer nofollow">Medium</a>. and <a href="https://coinmarketcap.com/community/profile/DeFiPlanet/" rel="noopener noreferrer nofollow">CoinMarketCap Community</a>.

Weekly Round-Up #50 | The Blockchain Trilemma: Why Scalability Remains a Key Challenge for Bitcoin and Ethereum Users

DeFi Planet

Other articles published on May 14, 2023

ChainGPT x Decrypt — Getting Started With AI Course

How to Spot Trade on Binance

Crypto Adoption on the Rise in Argentina

Tether Generated $1.5B in Profits in Q1, 2023, Holds 2% Bitcoin in Total Reserves

Don't Miss New Meme Coin DogeMiyagi If you Already Missed Dogecoin And Shiba Inu Early

LBank Exchange Listed PEPEAI (PEPEAI) on May 12, 2023

Join our free newsletter for daily crypto updates!