Currently, all blockchain consensus protocols (eg. Bitcoin, Ethereum, Ripple, Tendermint) have a challenging limitation: every fully participating node in the network must process every transaction. Recall that blockchains have one inherent critical characteristic — “decentralization” — which means that every single node on the network processes every transaction and maintains a copy of the entire state.

While a decentralization consensus mechanism offers some critical benefits )fault tolerance, a strong guarantee of security, political neutrality, etc.) comes at the cost of scalability.

• Since every node is not allowed to validate every transaction, we somehow need nodes to have a statistical and economic means to ensure that other blocks are secure.
• There must be some way to guarantee data availability.
• Transactions need to be processed by different nodes in parallel in order to achieve scalability. However, transitioning state on the blockchain also has several non-parallelizable (serial) parts, so we’re faced with some restrictions on how we can transition state on the blockchain while balancing both parallelizability and utility.