The Blockchain Quadrilemma: When Also Computational Effectiveness Matters

Abstract

Ethereum's founder Buterin raised the challenge of solving the blockchain Trilemma towards a decentralized computer that could together achieve high degrees of security, scalability, and decentralization. Later on, Algorand claimed to have resolved Buterin's blockchain Trilemma and is nowadays increasingly adopted by designers of decentralized computations. Motivated by the need of selecting a blockchain to run some decentralized computations, we observe the limitations of using the Trilemma as benchmark, and we propose as alternative a Quadrilemma that takes into account also computational effectiveness, namely the capability of running non-trivial decentralized computations at affordable costs. For concreteness, motivated by the current trends of using blockchains for the management of non-fungible tokens (NFTs) related to highly desired items (i.e., NFTs for art), we consider the use case of decentralized auctions in various scenarios that mainly differ on the desired degree of confidentiality. Our contribution gives the following insights. Except very limited cases where also Bitcoin can be taken into account (i.e., when latency is not a big deal and only notarization is required), Algorand can often be the right choice as long as decentralized computations consist of basic operations only. Instead, Ethereum is advisable when more sophisticated computations are required, in particular when ad-hoc cryptographic tasks are essential, and one can afford the involved costs and latency. Focusing on those three blockchains, the state of affairs about resolving the blockchain Quadrilemma is somewhat unsatisfying. Even in natural cases where computations and storage requirements for a smart contract are low (e.g., public-key encryption), none of those decentralized computers achieves simultaneously low cost and fast transaction confirmations.