Decentralization affects the scalability of a blockchain by creating a trade-off between security, decentralization, and efficiency, often referred to as the blockchain trilemma. In a decentralized network, many nodes (computers) participate in validating transactions and maintaining the blockchain. While this structure enhances security and trustlessness, it can slow down the system, making it harder to scale.

Each node in a decentralized network must process and store a copy of all transactions, which can lead to delays in transaction speed as the network grows. As more users and transactions are added to the blockchain, the time required for consensus increases, causing congestion and higher transaction fees. This is especially true for blockchains like Bitcoin and Ethereum, where decentralization is prioritized over speed.

To scale decentralized blockchains, several solutions have been proposed. Layer 2 solutions like the Lightning Network (Bitcoin) and Optimistic Rollups (Ethereum) aim to offload transactions to secondary layers, reducing the burden on the main blockchain while maintaining decentralization. Sharding is another approach that splits the blockchain into smaller segments to handle more transactions in parallel.

In essence, while decentralization ensures security and reduces the need for trusted third parties, it presents a challenge for scalability, requiring innovative solutions to handle large-scale use efficiently.