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Blockchain guide
Pros and cons of blockchain

Guide contents

Pros and cons of blockchain

Quick take:

  • Blockchain technology eliminates the need for intermediaries or middlemen in a transaction, reducing the chance of corruption.
  • Decentralized networks with no single point of failure make it difficult to disrupt or take down data stored on the network.
  • Benefits of blockchain include decentralized trust, improved security, quick transactions and greater accessibility for users.
  • Negatives of blockchain tech include cost, energy usage, and regulatory issues

The truth is that there is a lot of hype surrounding blockchain technology which can make it dfficult to navigate.

When everything feels like extreme hype or FUD,  it can be hard to decide who to trust and what information is credible.

There are undoubtedly exciting opportunities presented by blockchain tech, but the smartest people out there need to understand both the benefits and drawbacks before jumping on board.

Let's take a quick look through a few of the pros and cons of blockchain technology so you can make better decisions and analysis of the best tools out there.  

Pros of blockchain technology

As with any new development, there are a number of reasons why people are getting so hyped up about blockchain technology. 

Below are a few of the key benefits of blockchain tech. 

Decentralized trust

Decentralized trust is a key benefit of blockchain technology.

By removing the need for intermediaries or middlemen in a process, it eliminates the potential for corruption and reduces costs associated with fees.

This is because data is stored over a decentralized network of servers after it gets validated via a consensus, meaning that transacting parties do not need to know each other to transact. This trustless environment allows for peer-to-peer transfer of value between parties without relying on a third party or central authority.

No single point of failure

Blockchain technology eliminates the possibility of a single point of failure.

Each node in the network shares the database, making it secure and tamper-proof. As such, if one node fails or is compromised, there are still other nodes that can continue to operate without interruption.

The use of a consensus process also helps to reduce the risk of human error, as manual data entry is not required for verification.

Additionally, blockchain technology makes it difficult for anyone to add false or inaccurate data to the blockchain or manipulate existing data, which can improve the overall quality and reliability of information stored on the network.

By eliminating single points of failure, companies can ensure their networks remain secure and reliable even in times of crisis.

Improved security

Blockchain technology is intrinsically more secure as it is decentralized. Any effort to change a record will be immediately apparent because copies and digital signatures are automatically compared.

User data is also protected from hackers by an additional degree of confidentiality as users of a blockchain network are not required to enter their personal and financial details.

The structure of a blockchain is designed to be robust and decentralized, with no single point of failure or control. This makes the network difficult to disrupt or take down, allowing it to continue operating even if individual nodes or components fail.

Additionally, cryptographic techniques are used to secure the data stored on the network which can make it resistant to hacking attempts, further contributing to its overall durability.

All these features make blockchain technology an ideal choice for those who require enhanced security and confidentiality for their data.

Quick transactions

Quick transactions are one of the biggest advantages of using blockchain technology.

Transactions on a blockchain network can be processed much more quickly than traditional centralized banks, often within a few seconds.

This is because the processes are automated and occur directly between parties, eliminating the need for manual processing or third-party intermediaries. As a result, companies who use blockchain rather than banks can save a lot of time and costs.


By providing a decentralized, peer-to-peer network, blockchain allows anyone with a computer and an internet connection to join the network and contribute to it.

This means that users can have more control over their own data, as they can choose which information to share and with whom.

Furthermore, the high level of security and transparency provided by blockchain technology ensures that users are in control of their own information and that it is not misused by others.

The decentralization of blockchain networks also makes them more accessible than traditional centralized systems.

This makes it easier for people from all walks of life to participate in the network without having to worry about their data being misused or abused.

Cons of blockchain technology

While the pros are pretty incredible, blockchain technology isn't without flaws. 

if you really want to understand and get involved in Web3, knowing the current limitations of blockchain technology is key.  

Below are a few of the drawbacks to blockchain technology. 

Scalability issues

Scalability is a major issue - probably the biggest issue - when it comes to blockchain technology.

The technology is limited in its ability to process transactions on a large scale, as each transaction needs to be validated by the majority of the nodes before it can be approved and added to the block.

This can lead to network congestion and high transaction costs, making it difficult for businesses to use blockchain technology for their operations.

There are solutions people are working on to this, such as layer 2 and 3 solutions (we'll cover more on those later). These solutions help solve the problem, but it's still a problem at its core.  

Furthermore, blockchain technology may not always be compatible with legacy networks that are already in place.

In some cases, these networks need to be completely replaced in order for blockchain technology to be used, which can be a significant undertaking and may face resistance from those who are reluctant to change.

Additionally, some blockchain technologies may not have the capability to work alongside legacy networks, further complicating the integration process.

As such, scalability remains one of the biggest challenges facing blockchain technology today.

Too secure for casual users right now

Blockchain technology has brought a lot of innovation to digital security. However, it's often little too secure for newbies to the space. 

If a private key (used to access blockchain wallets where assets are stored) is lost or stolen, it may not be possible to recover access to the funds associated with it. This could be a major issue for businesses who are considering using blockchain technology for their operations.

To address these security concerns, some blockchain technologies offer private transaction options and user-specific authentication as a way to protect users’ data from being revealed to the public or competitors.

However, this may not be enough to convince some organizations that blockchain technology is safe enough for their needs. Ultimately, security should be taken into consideration when evaluating whether or not blockchain technology is right for an organization’s needs.

Energy usage and costs

The energy-intensive nature of consensus protocols like Proof-of-Work can be expensive for miners who need strong rigs to solve challenging mathematical problems.

Additionally, developing a customized blockchain solution from scratch can require a significant investment in resources and expertise.

Replacing legacy systems with blockchain technology can also be costly, as organizations must invest in the necessary infrastructure and personnel to make the transition.

Fortunately, more efficient consensus protocols like Proof-of-Stake and Proof-of-Authority are helping to reduce the energy costs associated with blockchain technology.

Additionally, there are many open source solutions available that may provide an organization with a cost effective way of implementing blockchain technology into their operations.

Ultimately, whether or not blockchain technology is a cost effective solution will depend on the specific features and needs of an organization.

Speed of network

The speed of blockchain technology is a major drawback that needs to be addressed.

Transactions on blockchains take longer to complete than traditional payment methods due to the need for miners (at least on proof-of-work chains).

Miners use specialized software and solve computational puzzles in return for new crypto tokens, which adds an extra layer of complexity and time to the process.

The computation needs of blockchain technology can be more repetitive than those of centralized servers, meaning that every time the ledger is updated, all the nodes in the network need to update their copy of the ledger as well.

This further slows down transaction times and makes it difficult for businesses to rely on blockchain technology for quick payments.

Blockchain technology is still relatively slow compared to other solutions available today.

This means that businesses may not be able to rely on it for quick transactions or payments, which could limit its potential applications in certain industries.

However, with advancements in technology and increased research into this field, there is hope that blockchain speeds will improve over time and become more competitive with other solutions available today.

Regulatory issues

The uncertain regulatory environment surrounding blockchain technology is a major disadvantage that must be taken into account when considering the pros and cons of using this technology.

In some cases, there may not be a clear set of regulations in place, which can create uncertainty and mistrust among users.

This lack of regulation can also contribute to the problem of ICO scams, in which individuals or organizations raise funds through the sale of tokens that may not have any intrinsic value. 

Governmental institutions may be hesitant to adopt blockchain technology due to its lack of oversight compared to other financial technologies.

It's important to consider the uncertain regulatory environment when evaluating the use of blockchain technology. It is essential for users to understand the risks associated with using this technology and take steps to protect themselves from potential scams or frauds. 


Blockchain technology has the potential to revolutionize the way data is stored and transmitted.

It offers a secure, decentralized system for organizations to store and share data without relying on third-party services.

The advantages of blockchain technology are numerous, including its immutability, transparency, and cost-effectiveness.

However, there are some drawbacks to this technology as well, such as scalability issues and the lack of regulation. Despite these drawbacks, with proper development and implementation, most of these issues can be overcome.

Overall, blockchain technology is an incredibly powerful tool that can provide organizations with immense benefits in terms of security and efficiency.

As more organizations begin to adopt this technology, it will become increasingly important for them to understand its capabilities and limitations in order to make the most out of it.

Other articles in this blockchain guide series