Alarmists in the crypto community are talking about the Fed, regulations, and shady machinations behind the scenes. Optimists are talking about a bright future with no central authorities and worldwide adoption.
We can stop arguing about these things for now. The short-term future of Bitcoin, Ethereum, and other large networks is safe.
However, developers still struggling to work on creating a solid foundation for something that could last for generations. The biggest issue right now is the near-impossibility to develop a network that could be equally decentralized, safe, and scalable.
The trilemma of the crypto world
If you want to make the network decentralized, you will inevitably sacrifice its efficiency and make it less scalable. When Bitcoin just started, it was cheap (in terms of fees) and quite fast.
Now, transactions take hours and even the lightning network can’t provide the required throughput. The cost of transactions is also growing.
Layer-1 solutions may bring relief, but they often open many doors for people who want to exploit the mainnet. The constant dance between scalability, safety, and decentralization is what holds the crypto industry from advancing.
Breaking these limitations to pieces and creating something impenetrable yet non-dependent on any central authority is required.
It will push many networks to a state where large investors are ready to get into the domain. So far, we had futile attempts at fixing the balance and reaching something that would be superior in one aspect without forfeiting anything significant in others.
Development teams across the globe are working to implement interesting solutions to this issue. Yet, the industry is still facing the same challenges as five years ago.
We may be closer to the solutions as many think
Ethereum has all the chances to be the first network to fix many issues by working closely with different layer-1 and layer-2 platforms that are aiming at solving safety and scalability issues.
The proof-of-stake model may push us a little bit closer to centralization, but it is a path that has the most potential right now.