Why every network compromises.
WHAT THE THREE PROPERTIES ARE
Decentralisation Security Scalability
WHAT THE OBSERVATION IS
Improving one generally costs another.
WHY
Verification by many participants is what provides security and decentralisation, and it limits throughput.
WHAT INCREASING THROUGHPUT USUALLY REQUIRES
Fewer validators More powerful hardware, excluding smaller participants Weaker verification
WHAT THAT COSTS
Decentralisation.
WHAT LAYER TWO APPROACHES DO
Process transactions away from the main network, settling periodically on it.
WHAT THAT PROVIDES
Higher throughput and lower fees, inheriting the base network's security to varying degrees.
WHAT VARYING DEGREES MEANS
Different designs make different assumptions, and some require trust in operators.
WHAT TO EXAMINE
What assumption each design rests on.
WHAT SIDECHAINS ARE
Separate networks with their own security, bridged to a main one.
WHY BRIDGES ARE THE WEAK POINT
They hold assets and have been the largest source of losses in the sector.
WHAT TO UNDERSTAND
That throughput claims without context omit the trade-off made.
WHAT TO ASK
What was given up to achieve it.
