Quantifying the Blockchain Trilemma: A Comparative Analysis of Algorand, Ethereum 2.0, and Beyond

Yihang Fu, Mingwei Jing, Jiaolun Zhou, Peilin Wu, Ye Wang, Luyao Zhang and Chuang Hu

Papers from arXiv.org

Abstract: Blockchain technology is essential for the digital economy and metaverse, supporting applications from decentralized finance to virtual assets. However, its potential is constrained by the "Blockchain Trilemma," which necessitates balancing decentralization, security, and scalability. This study evaluates and compares two leading proof-of-stake (PoS) systems, Algorand and Ethereum 2.0, against these critical metrics. Our research interprets existing indices to measure decentralization, evaluates scalability through transactional data, and assesses security by identifying potential vulnerabilities. Utilizing real-world data, we analyze each platform's strategies in a structured manner to understand their effectiveness in addressing trilemma challenges. The findings highlight each platform's strengths and propose general methodologies for evaluating key blockchain characteristics applicable to other systems. This research advances the understanding of blockchain technologies and their implications for the future digital economy. Data and code are available on GitHub as open source.

Date: 2024-07
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