As blockchain technology booms, blockchain solutions like Ethereum are running into trouble. The Proof of Work consensus that Ethereum is built on has been one of the pillars of blockchain technology. But this type of consensus consumes a vast amount of energy per transaction.
Because of its linear structure, the network can quickly get congested, causing transactions to slow down and fees to increase substantially. This creates a problem commonly known as the blockchain trilemma: the inability to balance security, decentralization, and scalability in a blockchain.
The trilemma issue is what developers in the blockchain space have been trying to solve for years. Still, it remains one of the significant barriers to mass adoption. To become as prevalent as the internet is today, blockchain must scale without sacrificing the decentralization and security that makes it appealing in the first place.
“I could see this problem coming when I started working in blockchain,” said Ben Jorgensen, Co-Founder, and CEO of Constellation Network. “I could see that Ethereum wouldn’t ultimately work—it would scale and get clogged.”
Solving the Trilemma
Constellation Network is one of the many companies working to find a solution to the blockchain trilemma. In the blockchain space today, these solutions generally take one of two routes.
To develop solutions that companies can use immediately, many developers, such as Polygon, have built Layer 2 solutions on Ethereum. These layers use a Proof of Stake consensus instead of Proof of Work to decrease the energy required and increase the system's efficiency.
While Layer 2 solutions address the sustainability aspect of the trilemma, they cannot solve it completely. Using a Proof of Stake system tends to have a centralizing effect consolidating control in the hands of those with the most tokens.
Thus, to truly solve the trilemma, companies like Constellation Network have created Layer 0—a new base layer on which developers can build blockchains. Jorgensen believes this will be a much more sustainable solution, addressing the root of the problem rather than just providing a quick fix.
The company’s tech has been in development since 2018 and is just now coming into its own. Constellation Network recently released its developer documentation and will launch its MainNet 2.0 at the end of September.
The company's Layer 0 solution is built on promising technology that could significantly impact the blockchain space. The network runs on Hypergraph technology with a Directed Acyclic Graph (DAG) infrastructure.
Like all blockchains, information flows in one direction to ensure immutability. However, instead of being built in a linear structure, a DAG is designed like a mesh that can expand and contract. That way, it can get as big as the data requires.
“We designed the system by looking at how information flows in nature,” said Jorgensen. “In the ecosystem of a forest, for instance, trees can communicate underground through fungi. In this analogy, the fungi are our Layer 0: it communicates with everything. On top of Layer 0 are our state channels—the trees, grass, and other plants of the ecosystem.”
This infrastructure solves the blockchain trilemma problem, increasing scalability while still preserving the original security and decentralization of blockchain. Because of the hypergraph structure of Layer 0, the network gets faster as it gets bigger. This follows the principle of generative economics: everything feeds into each other.
In a test, Constellation Network’s infrastructure could process 80,000 transactions in 7 seconds with just six nodes, and Jorgensen says that this number can go up to 19 million. The test also showed consensus completed in parallel.
Reaching Mass Adoption
By solving the blockchain trilemma problem, Layer 0 solutions may open the door for the mass adoption of blockchain. Constellation Network hopes to do this by creating a balance between the base layer and the application layer. This gives developers complete flexibility and configurability in designing and building applications on the base layer.
“Through flexibility and configurability, we create technical feature parity to the tools of Web 2,” said Jorgensen. “We’re creating an ecosystem that will enable interoperability through technical dependencies and both iterations of the web.”
Enabling this flexibility can also open up new use cases that build on dependencies from both worlds, such as connecting a tokenized economy to hardware and data sensors from smart homes or connecting the Metaverse with layers of applications that interoperate between different token economies. In essence, this could be the foundation for a new era of the internet.
The possibilities are exciting, but there are still some significant barriers to the mass adoption of blockchain. While DeFi has created more mature tokenized economies that can match the power of traditional finance, it will need to connect to real-world utility to achieve ecosystem stability. For this to happen, a better public understanding of blockchain is necessary.
Although centralized exchanges for buying and selling cryptocurrency are a popular way to interact with the blockchain, Jorgensen sees these as barriers to entry for the larger public. The prevalence and importance of these exchanges often cause people to misunderstand the primary value of blockchain and develop more suspicion of the technology.
Instead, Jorgensen says, there needs to be better education about the value of Web3 for it to reach mass adoption. Business leaders must know how to incorporate this new technology into their conventional workflows and applications. In addition, a tokenized economy will likely need government regulation to provide accountability guidelines and prevent community backlash.
The Future of Web3
With better infrastructure and education, many have predicted that Web 3 will replace the internet we know today. However, with the importance of Web2 technology in today’s world, it is more likely that a hybrid ecosystem will develop, merging the best aspects of both and creating greater interoperability.
A hybrid Web2 and Web3 ecosystem can improve today’s internet infrastructure by extending the opportunities for value creation. In Web2, value only occurs on the application level and not in the base layer. In Web3, however, value can be created in the base layer protocol. Constellation Network’s system creates a balance between the protocol and application layers that give developers complete flexibility in building applications connected to the base layer.
The type of flexibility that blockchain allows for is attractive to developers. There has already been an enormous growth in developers shifting into the space, and as they build more and better applications, consumers will come with them.
“The space will progress as people are more educated on these opportunities, user experiences are simplified (enough for my mother to use), consumers are activated through governance, and developer tooling is configurable to match existing programming languages,” said Jorgensen.