Blockchains don’t scale. Not today, at least. But there’s hope.

In a traditional database system, the solution to scalability is to add more servers (i.e. compute power) to handle the added transactions. In the decentralized blockchain world where every node needs to process and validate every transaction, it would require us to add more compute to every node for the network to get faster. Having no control over every public node in the network leaves us in a pickle.   As a result, all public blockchain consensus protocols that operate in such a decentralized manner make the tradeoff between low transaction throughput and high degree of centralization. In other words, as the size of the blockchain grows, the requirements for storage, bandwidth, and compute power required by fully participating in the network increases. At some point, it becomes unwieldy enough that it’s only feasible for a few nodes to process a block — leading to the risk of centralization.   In order to scale, the blockchain protocol must figure out a mechanism to limit the number of participating nodes needed to validate each transaction, without losing the network’s trust that each transaction is valid.