Evaluating Ethereum

Understand what using Ethereum can mean in practice for institutions, how it differs from other infrastructure models, and the trade-offs those differences create.

What using Ethereum means in practice

Ethereum can complement existing digital infrastructure rather than replace it. Institutions can use it selectively alongside current systems while retaining authority over their policies, data, and service delivery.

Can institutions use Ethereum while keeping sensitive information confidential?

Yes. Confidential or sensitive data does not need to be stored on Ethereum. They can remain in existing systems, while only the information needed for verification or coordination is recorded on the network. Privacy-preserving methods can also allow specific facts to be verified without revealing the underlying data, further limiting what needs to be disclosed.

What are the cost implications of using Ethereum in digital public infrastructure?

The costs depend on what Ethereum is complementing or replacing. A conventional database managed by a single institution may have lower direct technical costs, but also places responsibility for access, security, and continuity with that operator. Disruptions or security breaches may result in additional recovery or migration costs.

Where multiple institutions need shared infrastructure, costs can also arise from maintaining integrations, reconciling records, and coordinating across providers. Ethereum can reduce some of these coordination costs and dependencies by providing common infrastructure maintained by a distributed network.

Although using Ethereum involves direct costs, its network transaction fees can be relatively low. Fees apply when recording or updating information, but not when simply reading existing records. A 2026 study by researchers at Rutgers University found median transaction fees of approximately US$0.012 on Ethereum's network in the first quarter of 2026, alongside a benchmark of US$0.0015 across three layer 2 networks, which are systems built on Ethereum that can process transactions at lower cost. Actual fees depend on the activity and network used.

Institutions should therefore assess the full lifecycle costs, including development, integration, maintenance, resilience, and dependence on individual service providers.

What are the environmental implications of using Ethereum?

Ethereum previously relied on proof-of-work, a consensus system that used energy-intensive mining to agree on network updates.

In 2022, Ethereum transitioned to a new consensus system, proof-of-stake. This reduced the network's estimated electricity consumption by approximately 99.95%. A 2026 study by the Cambridge Centre for Alternative Finance estimates Ethereum's annual electricity consumption at 7.87 GWh, roughly equivalent to the combined annual electricity consumption of 2,900 average UK households.

Despite its relatively low electricity requirements, Ethereum processed over 524 million transactions in 2025, with additional activity on networks built on Ethereum. Electricity consumption does not increase in direct proportion to transaction volume.

Does using Ethereum mean giving up institutional control?

No. Using Ethereum does not require institutions to relinquish authority over policy, eligibility requirements, compliance, access controls, or operational decisions. Ethereum can provide shared infrastructure for coordination and verification while institutions continue to set the policies, requirements, and operational arrangements for their own services.

How Ethereum compares with other public blockchains

Public blockchains are not all designed and governed in the same way. These differences can have important implications for institutions. The comparisons below examine how Ethereum’s approach differs from other public blockchains.

Resilience

How widely can a software failure spread?

Ethereum

Ethereum is supported by multiple independently developed software implementations that follow the same network rules and are written in different programming languages. This diversity reduces reliance on a single codebase and lowers the risk that a defect or security vulnerability in one implementation disrupts the wider network.

Other public blockchains

Some public blockchains rely more heavily on a dominant software implementation or closely related versions of the same software. This can increase the risk that a shared defect affects a larger part of the network.

Distributed control

Who can participate in the network’s ongoing operation?

Ethereum

Anyone who meets the publicly documented technical and economic requirements can help operate the Ethereum network and verify transactions. Access is not determined by appointment or approval from a central authority.

Other public blockchains

Some public blockchains assign responsibility for confirming transactions to a predefined, elected, or otherwise limited group. This can make coordination more direct, but concentrates operational responsibility and influence among fewer participants.

Governance

Who has the authority to change the rules?

Ethereum

Changes to Ethereum’s shared rules can be proposed by participants across the Ethereum community and are developed through an open process of review, debate, and revision. No single organization can put a change into effect on its own; changes must be implemented by independent software teams and adopted across the network.

Other public blockchains

Some public blockchains give a foundation, company, committee, or other defined group more direct authority over network changes. This can enable faster or more coordinated decisions, but creates greater dependence on that governing body.

For a broader technical assessment of blockchain networks, see OpenZeppelin’s Technical Risk Assessment on Blockchain Networks (2026) PDF, opens in a new tab.

How Ethereum compares with private blockchains

Comparing Ethereum with private blockchains involves more than assessing technical capabilities. The arrangements underlying shared infrastructure can also have important implications for institutional autonomy and long-term continuity.

Network operation

Who can take part in operating the network?

Ethereum

Private blockchains

Participation in operating a private blockchain is limited to organizations or individuals approved under its governance arrangements. This allows a defined group to coordinate network operations, but continued participation depends on those responsible for granting and maintaining access.

Independent verification

Who can independently verify the shared record?

Ethereum

Ethereum’s public record can be independently verified without relying on a single institution or provider. Institutions can run their own software to check that transactions and changes to the shared record follow the network’s rules.

Private blockchains

In private blockchains, verification may be limited to approved participants or depend on infrastructure operated by a consortium. Independent verification therefore depends on the network’s governance, access arrangements, and continued availability.

Distribution of authority

Who controls the network and how it is used?

Ethereum

The Ethereum network is operated by independent participants, without any single institution controlling its shared rules. Institutions can use Ethereum to build digital systems and deliver services while retaining authority over their own policies, access requirements, and operational decisions.

Private blockchains

In private blockchains, designated operators or a governing body have authority over participation and network changes. This can support coordination among participating institutions, but continued access and operation depend on the governance arrangements and cooperation of those responsible for the network.

Operating costs and continuity

What is required to keep the network operating over time?

Ethereum

The Ethereum network is maintained by independent participants, allowing institutions to use shared infrastructure without establishing and maintaining a separate blockchain network. The main costs for institutions typically arise from developing and operating their own applications and supporting infrastructure.

Private blockchains

Private blockchains require ongoing investment in infrastructure, security, maintenance, and operations. These recurring costs can place a substantial financial burden on institutions, particularly after initial funding ends. Without sustained support, institutions may need to assume operating responsibilities or migrate their systems and records.