From a technical point of view, creating a centralized network that supports transactional scalability is not difficult. This has already been done by PayPal, Visa, MasterCard and many others. But creating a system on the blockchain that offers users the optimal combination of scalability, decentralization and security is difficult. Vitalik Buterin outlined the scalability trilemma, according to which blockchain systems, in fact, can possess only two of the following three properties:

Decentralization : defined as the ability of the system to work in a scenario where each participant has access only to O © resources, that is, an ordinary laptop or a small VPS.

: defined as the ability of the system to work in a scenario where each participant has access only to O © resources, that is, an ordinary laptop or a small VPS. Scalability : defined as the ability to process O (n)> O © transactions.

: defined as the ability to process O (n)> O © transactions. Security: defined as security against intruders with up to O (n) resources.

Bitcoin and Ethereum were primarily created for decentralization and security, sacrificing scalability (Bitcoin supports ~ 3 transactions per second, and Ethereum supports ~ 12). This turned out to be an effective way to promote the system, but as the network grows, limitations begin to show up.

There are various new blockchains that are sacrificing decentralization or security and are thus trying to spin up the network. It is not yet clear how effective this approach will be. But until now, no one has found the combination of decentralization, scalability and security necessary to create a fully functional large-scale cryptocurrency network.

There are several possible scenarios for solving the scalability problem of a cryptocurrency network:

1) The problem of scalability will be solved by the communities with the greatest network effect and the attention of developers (Bitcoin and Ethereum).

2) There will be new networks in which scalability will be provided initially, and users will gravitate towards them.

3) Cryptocurrency networks will not be able to scale.

Considering the network effect and attention paid to Bitcoin and Ethereum, as well as the level of teams working on scalability solutions for these networks, it is very likely that solutions for Bitcoin and Ethereum will make it possible to use these networks for transactions on a massive scale.

It is also possible (although less likely) that a critical mass of developers and users will switch to next-generation networks that initially support high bandwidth (Cosmos, Dfinity, EOS or something else). If we see a significant increase in transaction demand (i.e., a few more applications like CryptoKitties) before the best solutions for Bitcoin and Ethereum appear, this could very well happen.

It is also possible (but even less likely) that cryptocurrency networks will not be able to scale.