In the previous article we took a look at some basic blockchain concepts and use cases.

Now let’s explore the differences between several prominent public blockchains (Bitcoin, Ethereum and Kadena) through the lens of challenges they are facing and understand how those challenges are addressed.

So, what are main problems of blockchain?

1. Privacy

Privacy is not the strongest suite of public blockchains because it is not fully matured area. What does this mean? Often public blockchains expose transaction details to all participants, which may not be suitable for all use cases. For example, all Bitcoin transactions are public and traceable.

One way to anonymize transactions is to use zero-knowledge proof.

A zero-knowledge proof is a cryptographic method or protocol where party A (the prover) proves to party B (the verifier) that a statement is true without revealing any information other than that the statement is true.

Ethereum is using it in Tornado Cash, a decentralized, non-custodial service that allows users to conduct private transactions. Kadena is working on bringing zero-knowledge infrastructure to blockchain as well.

2. Smart contract security

A smart contract is a self-executing contract with the terms of the agreement directly written into code.

The programming language used to write smart contracts plays a significant role in influencing their security. To ensure higher level of security within the blockchains some languages deliberately made Turing-incomplete.

Turing completeness is a property of a programming language or system that indicates it can perform any computation that a Turing machine can, given enough time and memory.

Bitcoin is using Bitcoin Script language, which is Turing-incomplete and more resistant to potential vulnerabilities. At the same time it restricts the types of complex smart contracts that can be implemented on the Bitcoin blockchain.

Ethereum prioritised flexibility in Solidity language. It is Turing-complete and enables more complex code. It has rich ecosystem and large developer community. On the flip side Turing-completeness of Solidity enabled some of the security attacks on Ethereum.

Kadena uses Pact language which is, same as Bitcoin Script, Turing-incomplete, so it does not allow recursion or infinite loops. This reduces potential attack vectors that may occur in smart contracts.

3. Scalability

Many blockchain networks face scalability challenges, struggling to handle a large number of transactions quickly. With the ever-increasing volume of transactions, the blockchain becomes heavy which means delays.

One of the reason for such heaviness is PoW (Proof-Of-Work) consensus mechanism that is used in Bitcoin.

Ethereum addressed this issue by moving from PoW to PoS (Proof-Of-Stake) that is considered to have shorter block times, leading to faster transaction confirmations and higher transaction throughput.

Another way to enhance scalability used by blockchains is adding layer 2 (term to describe scaling solutions build on top of layer 1). For example for Bitcoin it is Lightning Network - a payment protocol that enables faster and cheaper transactions by creating off-chain payment channels.

Kadena’s Chainweb (scalable PoW consensus algorithm) architecture is designed to address scalability issues in layer 1. By connecting multiple chains, Kadena seeks to achieve higher transaction throughput without sacrificing security.

4. Energy Consumption

While being proved secure consensus method PoW has another downside - it is very energy-intensive. In PoW, miners hash the block header nonstop to reach the target value. As an effect, the electricity requirement reach maximum on scale.

So because of PoW Bitcoin consumes a lot of energy. According to the Cambridge Center for Alternative Finance (CCAF), Bitcoin consumes around 156.33 Terawatt Hours per year which is energy consumption level of a small country.

Before moving to PoS Ethereum consumed 21.41 Terawatt Hours per year, after the move it is 6.93 Gigawatt Hours per year. So PoS seems to be an energy-saving alternative to PoW. Miners in PoS have to prove the ownership of the currency. It is assumed that people with more currencies are less likely to attack the network. Can single richest person take over the network then?

The design of Kadena’s Chainweb scalable PoW consensus algorithm claims to be more efficient and secure compared to traditional PoW-only systems, making it a “greener” alternative for crypto mining.

Clearly blockchains have some challenges to overcome in areas of privacy, security, scalability and energy consumption. In my opinion it is important before production usage to understand technology limitation, trade-offs and do your own research.


  1. Architecting Enterprise Blockchain Solutions by Joseph Holbrook.
  2. Blockchain for Real World Applications by Rishabh Garg.