Ethereum Blockchain Performance and Scalability

Like Bitcoin, the main reason for the Ethereum scalability problem is the network protocol that each node in the network has to process each transaction. Ethereum 1.x implements a slightly modified version of the proof-of-work (PoW) consensus mechanism. In Ethereum, miners have to race to find the nonce to meet the target difficulty. Every node needs to verify that the miners’ work is valid and keep an accurate copy of the current network state. This greatly limits the transaction process capability and throughput of the Ethereum blockchain network. Currently, it can only process 12-15 transactions per second.

Blockchain scalability trilemma

First used by Vitalik Buterin, the scalability trilemma is a concept in blockchain regarding its capability to address scalability, decentralization, and security, without compromising any of them. The trilemma claims that it is almost impossible to achieve all three properties in a blockchain system:

Decentralization: This is a core tenet upon which Bitcoin and blockchain were created. Decentralization enables censorship-resistance and permits anyone to participate in a decentralized ecosystem without a central authority or intermediary.