When I gaze at the blighted lands of the Crypto space, I often feel despair. It's a world full of traps, scams, and other insidious activities. It's impossible to not at least consider that the whole space is going to just collapse. The once promising technology brought low. Whether it is: By their maker's own hand. The schemers delight. Or a government purge. The space is DOOMED. At least that is what they want you to believe. The truth is far, far more complicated. It is easy for creators in the blockchain space to fall prey to a multitude of failure modes. We have to start a little further back before we start talking about those failure modes.

The Scalability Trilemma

Vitalik Buterin coined this term, so I'll just show you what he has to say about it.

The scalability trilemma says that there are three properties that a blockchain try to have, and that, if you stick to "simple" techniques, you can only get two of those three. The three properties are:

Scalability: the chain can process more transactions than a single regular node (think: a consumer laptop) can verify.

Decentralization: the chain can run without any trust dependencies on a small group of large centralized actors. This is typically interpreted to mean that there should not be any trust (or even honest-majority assumption) of a set of nodes that you cannot join with just a consumer laptop.

Security: the chain can resist a large percentage of participating nodes trying to attack it (ideally 50%; anything above 25% is fine, 5% is definitely not fine).

At first glance, this looks like a classic set of 3 trade-offs. This kind of making sense. Right. Right? It's not, though, not at all. Security is fine, but Decentralization is really just a subset of Security, isn't it? What about Scalability? It is a function of how secure the network is. The more secure and stable the design of the technology. The better it can scale. Long story short. The trilemma is bullshit. It's a nice sounding idea that distracts from reality and confuses people for no reason.

What do I mean by that? Decentralization and Scalability are just pieces of a good security plan. That plan has to include social, individual, technological (hardware /software), and monetary solutions to actually be secure. It has to be secure against all comers. Both its users and external forces. Claiming decentralization is anything but security is dishonest. And that is the real problem with the trilemma.

Why attack surfaces matter?

Your blockchain network has attack surfaces elsewhere. What are attack surfaces? I hear you ask. It is a term from the cybersecurity industry. Here is the definition.

The set of points on the boundary of a system, a system element, or an environment where an attacker can try to enter, cause an effect on, or extract data from, that system, system element, or environment.
The National Institute of Standards and Technology (NIST)

So let us take a look at some easier to point at attack surfaces and their problems.

Technological

• The myth: A lot of blockchains will tell you they have amazing technology. They are superfast/very decentralized/secure, and safer than water. It is so well-designed that a takeover attack could never happen.

  • The truth: Most blockchains have a good enough technical design that a pure 51% (hashing power or stake) attack is unlikely. Some of it is outright amazing. A majority of maxis for one coin or another will vehemently disagree that the other coins are safe. Since they have the one true solution.

• The myth: Everyone will have their own hardware to access the blockchain from.

  • The truth: How? If we really want blockchain to be everywhere. How does the poorest? Or, even someone that can just afford to live day to day. Have the money to have a whole system just for a blockchain? Any design that requires hosting your own node is doomed to leave out billions of people.

• The myth: All the big name blockchains networks are decentralized enough.

  • The truth: Sadly, no. Many miners, nodes, validators are run or paid for solely by an organization or a handful of organizations.

• The myth: Good blockchains have to have smart contracts built-in.

  • The truth: False. Good blockchains need three things: immutable transactions, free transactions and data storage. Why all three? Because without all three, networks based on them have to re-invent their own security. Which is a waste of time, resources and makes them a new level one network.

Social

• The myth: All blockchains are censorship resistance.

  • The truth: Kind of, but most are only resistant to changes to the previous blocks in the chain. Freedom to Transact is basically ensured at the blockchain level. Not at the exchange or institutional level, where KYC is required and people can be rejected. On the other hand, they don't provide any data storage, making Freedom of Speech practically impossible without having workarounds. Some will argue that Freedom of Speech isn't something a blockchain should do or worry about. I disagree. Users and developer need someway to discuss/vote on changes and plans that are not likely to disappear from the face of the web randomly with or without cause. As has happened to several people on pick your favorite social media site.

Individual

• The myth: You can trust any transaction on the blockchain. Especially smart contracts with multi-sig accounts.

  • The truth: Obviously No. There are many factors, but the largest one is: Do you trust the reputation of the people putting the smart contract together or the multi-sig keyholders? It is better if the network has a built-in reputation system, or at the very least a way they can let others know when trust has been breached.

• The myth: No one person can make a blockchain network worthless or bring it down.

  • The truth: Yes, YES they can. All it takes is Uncle Sam, the Jade Emperor or the Motherland banging on certain doors to have some blockchains' shutdown. Sometimes that's cause those people have access to all the hardware running the network or like below they have access to a controlling share of the tokens/coins.

Monetary

• The myth: The coin was fairly disturbed to all users.

  • The truth: Let us talk about coin distribution and the ways you can do it wrong. Pre-mines, investors, initial coin offerings (ICO), over the counter (OTC) sales are all ways that one entity can have too much influence over the whole network. Anytime you have investors, company or even a person involved that is holding on to a large portion of the total coins or token, you have just endangered the whole blockchain and have in the past. You can look here to see how bad it is and don't forget reserves are still under the teams control until given out or sold OTC.
    

• The myth: Fees keep the network safe.

  • The truth: They can and do. However, you need to ask yourself who they keep out. They don't just keep out bad actors. They lockout users with smaller balances to start with and lockout more and more has the fee increases. The fee that has to increase has demand for the same limited space in the block increases. Which will leave only the biggest names with the most money operating on that network.

  The Last Words

  The above issues are just the easy to spot ones. The easy ways to kill or capture a blockchain. If your blockchain has any of these, what they don't have is survivability. The problem is clear to but a handful of normal crypto users, and much clearer to the people of Hive. A captured blockchain is just a bad or worse than a dead one. Since not everyone can freely transact on it anymore.

It doesn't matter what you build if it can't survive internal and external pressures.