The “Impossible Trinity” (security, scalability or high performance, and decentralization) is a frequent topic when it comes to public chains. A public chain normally focuses on two features of the Trinity, while compromising on the third.
In the blockchain space, the three features of the Impossible Trinity are defined as follows:
Decentralization refers to having a large number of nodes participating in the generation and validation of blocks. Generally speaking, the more nodes there are in a blockchain network, the more decentralized it is.
Security is the cost of gaining control over a network. Blockchain networks are often anchored to real-world assets through the design of their consensus mechanism. For example, blockchains based on proof-of-work (PoW) are anchored to hashrate.
P erformance refers to transactions per second (TPS).
Challengers to the “Impossible Trinity”
Confronted with the “Impossible Trinity”, mainstream blockchains that include Bitcoin, Ethereum, and EOS have all compromised on one feature of the Trinity. Bitcoin, a decentralized cryptocurrency, is decentralized and secure yet inefficient. Though Ethereum 2.0 will adopt the PoS consensus mechanism, the network is now frequently congested due to complex application scenarios and its low performance. Solana, a next-generation public chain, somewhat sacrificed decentralization and security for low fees and high speed by adopting Proof of Stake (PoS) and Proof of History (PoH). However, such features have been exploited, leading to network downtime.
Facing the “Impossible Trinity”, in addition to compromises, public chains have come up with many new solutions over recent years. For instance, there is the layered solution of Layer 2, as well as innovative consensus mechanisms such as the CPoS consensus invented by CoinEx Smart Chain (CSC).
CSC is a smart chain that launched its mainnet last year. Unlike the mainstream public chains that compromise on a certain feature, the public chain features compatibility with EVM, as well as technical innovations. CSC uses the CPoS consensus protocol based on PoS and also taps into the PoA block generation mechanism. Such an approach allows the public chain to be decentralized, efficient, and cheap-to-use, striking a nice balance between the “Impossible Trinity”.
Balancing the “Impossible Trinity” through innovations
In terms of scalability, CSC’s CPoS consensus mechanism enables strong performance (1,000 TPS) as it is based on PoS. When it comes to decentralization, CSC features 101 validators, which makes it more decentralized. As for security, the public chain taps into the consensus characteristics of PoA to create a higher staking threshold (10,000 CET) for validators. Such a requirement of a large CET holding drives up the cost of gaining control over the network, keeping CSC safe and secure.
The PoS consensus of CSC saves more hashrate and efficiency that would be wasted due to competition in a PoW-based network. This, coupled with the PoA block generation mechanism, allows for a more efficient consensus. Although some people may question the security of PoS, from an economic perspective, block generation through staking gives the blockchain certain defensibility, which is manifested in obstacles preventing on-chain attacks. For instance, the community could be promptly aware of token hoarding and guard against attacks from certain addresses.
At the same time, as attackers stock up on more tokens, the token price might continue to rise, which drives up the cost of an attack. In the case of an attack, the value of tokens held by attackers would slump along with the token price. For example, CSC requires validators to hold a large amount of CET, and the cost of a price slump might outrun the cost of tampering with the blockchain data, which makes the attack pointless. Therefore, CSC’s consensus mechanism ensures security without making great compromises on scalability and decentralization.
Extremely high efficiency, fully ensured security, and complete decentralization, such a perfect Trinity is almost impossible for any blockchain to achieve. CSC has blazed a trail and struck a “balance” between the three features with its innovative twofold consensus mechanism, giving rise to a decentralized, efficient, and user/developer-friendly finance ecosystem. This pursuit of a balanced Trinity may bring more innovative solutions to the “Impossible Trinity”, catalyzing the rapid progress of blockchain technology.