A Deep Dive on Ethereum's Pros and Cons


Developer's Corner


May 30, 2023

This blog is a part of the series around Naval Ravikanth’s podcast episode that featured Ethereum’s co-founder, Vitalik Buterin. You can access the links to all the blog posts written around the podcast episode here. In this blog, we briefly touch upon what Ethereum is, and the various pros and cons of Ethereum discussed in the podcast episode(s).

A simple, no-nonsense definition of Ethereum (taken from the podcast conversation), is “a blockchain you can build any app on top of.”

Before we move on to discussing the pros and cons of Ethereum, we discuss the blockchain and its characteristics at large to give you, the reader, full context. So first things first, Ethereum like we defined above is a general-purpose blockchain. In the simplest of terms, you could say that Ethereum runs by the means of smart contracts (which contain a piece of code). These smart contracts get created when a piece of code is written and published on the Ethereum blockchain network through a transaction. To do this transaction, one has to pay a fee in ETH. This fee is variable and depends on the size of the transaction.

Once a certain piece of code is added to the blockchain, it becomes a smart contract. Now this contract is called “smart” because the blockchain will keep track of the contract, its changes and so on without relying on any intermediary. From now on, anyone that wants to interact with the smart contract will have to do a transaction while specifying what they intend to do.

Learn more about how smart contracts work on Ethereum here: https://ethereum.org/en/developers/docs/smart-contracts/

Pros and Cons of Ethereum

Now let’s move to the pros and cons of Ethereum. It is worth noting that the pros and cons of Ethereum are intertwined, and are best understood as two sides of the coin. We have, therefore, taken certain key statements about Ethereum from the podcast and expanded upon both the angles– pros and cons.

Statement 1: Eth trades efficiency for transparency”

To make more sense of how efficiency is sacrificed for transparency, one has to understand how Ethereum processes each transaction. Say you publish a change to a smart contract; now every single node on the Ethereum blockchain will verify your change and contribute to the process of publishing the change to your smart contract on the blockchain.

Now one can very easily confuse the above process with parallel computing, as pointed out by Naval in the podcast. In parallel computing, we take a transaction and run various pieces of that code at once across all the available nodes. But in the case of Ethereum, we’re running the entire code (instead of pieces) across each node in the blockchain network.

In essence, Ethereum is a trusted cloud computer on which each transaction is verified by every single node on the blockchain network. This highly transparent nature of Ethereum is its biggest pro, and the fact that it has to give up efficiency to an extent in return is the con.

Statement 2: Only high-value transactions can afford the blockchain

Transacting on Ethereum means getting every node to verify what you’re doing on the blockchain, and this happens at a cost (gas fee). As a result, computing core business logic of an app makes more sense over computing every single logic of a given app on the blockchain.

At least the gas fees in the current times force most applications and individuals to do only high-value transactions on the blockchain, which is one of the cons of Ethereum.

But in the long run though, both low-value and high-value transactions should be ideally able to rely on Ethereum.

Statement 3: Doing away with “trusted” third parties

Let’s go back to the concept of Ethereum blockchain again. Ethereum is a big cloud computer that has several thousand nodes, all working in coherence with each other. Whenever a transaction happens and either adds or modifies anything in the blockchain, every single node on the blockchain will verify the transaction.

So in total, Ethereum is the only entity to have complete control over a smart contract once it's added to the blockchain. Ethereum, however, isn’t a single entity. It’s a combination of all the nodes that constitute its processing power, making Ethereum a decentralized entity. When you transact with Ethereum, you are directly dealing with a highly transparent network, and not any “trusted third-party.” This is one of the biggest advantages of the Ethereum blockchain, and the same is true for any decentralized network. It also brings us to the next statement about Ethereum:

Statement 4: Trading performance for security

Ethereum, in return for security and transparency, trades performance and efficiency, like stated earlier. While Ethereum trading performance for security may seem like a con right off the bat, it is a pro too.

Statement 5: Ethereum’s limitations are latency and privacy

As of now, a transaction submitted to the Ethereum blockchain would need up to half a minute for getting added to the blockchain. Though it may come down to ten or 12 seconds in the near future, it may not go further down any time soon. As a result, Ethereum may not be the best choice for applications and use cases that need to be more real-time than payments.

Now let’s move on to privacy. Transactions on Ethereum are publicly variable, as a result of which just about anyone can view the transactions taking place on the blockchain. There are cases where certain transactions need to be private and still verifiable by the blockchain. In such cases, methods such as “zero-knowledge proof” can be used where you can prove that something is valid without actually revealing it or making it publicly verifiable.

Statement 6: There are ways to get back your privacy

Before we break down the above statement, we first need to understand that putting anything on the blockchain invariably means opening it up for public verification. So in that case, getting back privacy translates to using other mechanisms, such as zero-knowledge proof or other cryptography approaches, for added privacy. A good example of this would be zk-Rollups.


Despite the various pros and cons that come with Ethereum, one thing stands unequivocally true: blockchain networks such as Ethereum (despite their privacy drawback we mentioned above), offer more privacy than centralized networks (Facebook, Amazon) any day.

About Arcana Network

Built for Ethereum and EVM-based chains, Arcana is the web3 infrastructure to easily onboard dApp users and enable user data privacy and ownership. Web3 developers use Arcana’s SDKs for a seamless, familiar user onboarding experience via social authentication and passwordless login. All user data is encrypted, secured with data access fully controlled by the users, and powered by blockchain.

Arcana has raised 2.7Mn USD from some of the leading investors and founders in the ecosystem such as Balaji Srinivasan, Founders of Polygon, Woodstock, Republic Crypto, and Digital Currency Group.

Want to know more about our latest testnet features? Book a demo.

Book a Demo

Official Links: Website | Twitter | Discord| Telegram | TG Announcement | Medium | GitHub

Schedule a Demo

The call is completely free and no commitment is required.

Copyright © Arcana Technologies Ltd. All rights reserved.

Schedule a Demo

The call is completely free and no commitment is required.

Copyright © Arcana Technologies Ltd. All rights reserved.

Schedule a Demo

The call is completely free and no commitment is required.

Schedule a Demo

The call is completely free and no commitment is required.

Schedule a Demo

The call is completely free and

no commitment is required.