**Summary:**
In this video, the speaker discusses the trilemma of blockchain, particularly focusing on Ethereum and its challenges with scalability due to smart contracts being housed on the same layer as data. The speaker contrasts this with projects like Hive, VSC, and SPK Network, which are exploring off-chain smart contracts to improve scalability, security, and cost-effectiveness. The discussion also touches upon the issues faced by Bitcoin's transaction layer and proposes using Hive for transactions and settlements to address these concerns.

**Detailed Article:**
The video starts with the speaker referencing a discussion by Dan, also known as "TheyCallMeDan," about the trilemma of blockchain, a concept popularized by Vitalik Buterin. Dan criticizes the trilemma, particularly targeting Ethereum's approach of having data, instructions, and applications all on the same level. The speaker highlights the challenges faced by Ethereum due to every smart contract needing to be housed on every node, leading to scalability issues and high transaction fees.

The speaker introduces Hive as a contrasting example, where smart contracts are absent at the base layer, simplifying functions to a few basic operations like posting, commenting, and voting. This streamlined approach of Hive, with text-only storage, is praised for its clean and efficient design. Hive's model eliminates the need for smart contracts, tokens, or NFTs, ensuring a more manageable and scalable blockchain.

Furthermore, the discussion shifts towards projects like VSC and SPK Network, which are exploring off-chain smart contracts to address scalability issues seen in Ethereum. By moving smart contracts to sidechains, processing power and storage are not burdened at the base layer, enhancing efficiency and scalability. The speaker outlines how these projects aim to decentralize the node system, ensuring security and incentivization in the network.

Regarding Bitcoin's transaction layer and the challenges with Lightning Network, the speaker suggests leveraging Hive for transactions and settlements to address high fees and potential centralization risks. By wrapping Bitcoin and utilizing Hive's transaction capabilities, there is a proposed solution to enhance speed, efficiency, and decentralization in transactions.

In conclusion, the speaker expresses confidence in the direction taken by projects like SPK Network, VSC, and Hive in addressing the scalability and security concerns present in current blockchain networks. The video underscores the importance of simplifying blockchain operations, off-loading smart contracts from the base layer, and leveraging efficient transaction and settlement mechanisms for enhanced performance in decentralized systems.

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*Notice: This is an AI-generated summary based on a transcript of the video. The summarization of the videos in this channel was requested/approved by the channel owner.*

The Trilemma was meant to be a Schema, like a chart type in Excel, fitting to show ETH and its EVMs with their attributes. That post was part of Vitalics' efforts to promote ZK operations. Back at that time, it wasn't so certain that the ETH community as a whole would be interested to see them on the "main" chain.

He stated later, that his post doesn't make sense for cross-chain comparisons to him either.

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Now, unfortunately, Vitalic has lost a lot of power in the ETH community over the last two years. Some of that is by design, because he was like a single point of failure, or still is to some degree. A different argument can be made, that some of his posts have been very alien to the brought Blockchain Dev community.

let me add just a couple of words to the Trilemma, this is the most neutral look at it:
![image.png](https://files.peakd.com/file/peakd-hive/manniman/23tGTQESXmWNCrhY5fMZLJ5eUm19YHno4B9a8YeR6HVjSegADjnSaiAh25V49ccWCBBUB.png)

I've always found it fascinating to explore the impact of transaction costs on this idea. If this is the only perspective you're focusing on currently, then as transaction fees increase, all three aspects should deepen. Moreover, in this worldview, decentralization, security, and scalability are often seen as competing forces. This means that you can either excel in handling a lot of transactions (scalability) or in protecting the system (security). That can only be true if you talk about the old-school POW ETH, it's like bending the world to your needs, promoting the metaphor to an axiom of the universe. Sufficiently confusing to not get called out by everyone, that is what it exceeds in the most.

However, the ultimate security feature in Blockchaintown is actually data transparency combined with the option to opt-out. This illustrates the concept that being adaptable (anti-fragile) is better than just being strong (hard/secure). And immediately brings to mind our journey as humans, a species of mammals on this Earth. We've emerged victorious in the evolutionary race largely due to our anti-fragility, haven't we? Sure we never won a bite battle vs a Tiger or arm wrestling vs a Silverback Gorilla.