Pros and Cons of Building on Top of Ethereum

Recently, I’ve had 5 potential clients approach me about consulting them, and they all said they didn’t know much about the Blockchain industry, although felt strongly that a Blockchain would make their business idea much stronger.

They also were under the impression that building on top of Ethereum and assigning their own token using Ethereum’s network would be the simplest, most efficient, and best option for them.

Unfortunately, there are a lot of things people don’t know, or haven’t considered, which is why I felt the need to explain my position.


PROS to using Ethereum (It’s like opening a franchise)

  1. Simple, easy, and fast to create an ERC20 token (but you still have to know how to program the token to do what you want).
  2. Solid development team that is actively working on new technologies that will continue to improve the stability, security, functionality, and scalability of the Ethereum Blockchain (Casper PoS for example).
  3. The development team is currently working on the next token version called ERC223 (and they have said it will be upgradeable from ERC20).
  4. You don’t need to build, maintain, or develop for your own Blockchain, and can piggy back off Ethereum’s.
  5. You can save time, money, and effort by syncing your system to Ethereum’s Blockchain and letting them manage everything for you.
  6. You can launch your ICO faster and get back to business.

CONS to using Ethereum (It’s like selling your soul to the devil).

1. Ethereum is a centralized Blockchain.

2. If Ethereum goes down, it will take your smart contracts down with it.

3. If ETH hard forks, it can have unforeseen consequences on your internal tokens, as they can be lost, hacked, or create a split in your service (See Ethereum Classic).

4. You are giving up your autonomy to Ethereum, which means you have no say in the future development plans of the Blockchain you are using, and if you disagree with the development plans, it’s already too late to make a switch without destroying your user data in the process (not to mention the coins they own and count on as a store of value + use on the platform to make it run). (ESP created a poorly designed Blockchain that crashed, so they rebuilt it from scratch and now it’s called ESP2).

5. If you want to improve the functionality of your Blockchain, you can’t. Instead, you must contribute to the development of Ethereum’s Blockchain, which you don’t own or control, and never will.

6. When you use Ether, it requires gas to complete transactions, therefore any time a transaction occurs using your token, the fee goes to enriching the Ethereum network, not your own network. At first the gas fees might not feel like much, but as your platform scales in size and user numbers, the gas fees will multiply, and your company will be stuck paying the bill out of your own profit.

7. When you launch an ICO and people see you are using a smart contract token from Ethereum, they might look at you as being lazy, greedy, or lacking the desire to build upon and develop your company’s product to make it better over the long-term.

8. Ethereum has competitors and CAN drop back to $8 like it was last year (EOS, WAVES, OMNI)..


If you boil it all down, by using Ethereum you are renting your company and hoping the owners let you keep it, and that the landlord doesn’t sell the office space under your feet and you are forced to move to another office with little time to prepare and plan for the transition.

By building your own Blockchain, you are buying your company, owning it in full, and being completely responsible for it’s growth. Therefore, it’s difficult for any owner to cause you pain, or any landlord to steal your space underneath you.


I have invested tremendous effort and capital over the past 18 months researching and experiencing different aspects of the Industry.

I have been hired by clients to provide services such as Blockchain industry analysis, consulting, advising, public speaking, and fundraising for Pre-ICO and ICO stages.

If you want to learn more, <a href=””><strong>click here.</strong></a>

(These articles can also be found on my <a href=””><strong>LinkedIn</strong></a>, <a href=”″><strong>Facebook</strong></a>, <a href=””><strong>Website</strong></a>, and <a href=””><strong>Medium</strong></a>).

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