Is network onboarding the biggest barrier to blockchain development, with costs 98% higher?
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Is network onboarding the biggest barrier to blockchain development, with costs 98% higher?
The dual constraints of scale of adoption and user acquisition cost.
Navigating Web3 tides with focused insightsSource: cryptoslate
Translation: Blockchain Knight
It's perhaps no surprise that internet login systems are as old as the internet itself.
In the 1960s and 1970s, as the first computer networks emerged, so did the need for user authentication. When ARPANET—the precursor to the modern internet—launched in 1969, it implemented the first formal login system.
These pioneering systems required users to enter a username and password to access network resources, a routine that billions of people have performed trillions of times since.
With the advent of the World Wide Web in the early 1990s, web-based login systems quickly became mainstream, serving as gateways to personalized digital experiences.
However, these early attempts at user authentication were often compromised by lax security standards.
At the time, many developers saw no issue with storing passwords in plain text, and more shockingly, embedding them directly into HTML code.
As the internet evolved, so did our methods for securing logins. The mid-1990s introduction of server-side scripting languages like PHP made password storage and verification significantly more secure. Cryptographic hashing became standard practice, and two-factor authentication emerged as an additional security layer.
Despite advances such as two-factor authentication and password managers—and leaps forward in other aspects of digital life—the fundamental "username-password" combination has persisted.
1. The Scale of the Login Challenge
While blockchain has made significant strides in industries like healthcare and logistics, login remains an area where distributed ledger technology (DLT) has yet to prove its utility.
A survey by LastPass found that “the average user manages around 70 passwords and logs in 20–30 times per day.”
A similar study by NordPass noted that “users spend approximately 15 minutes per day logging in and out of accounts.” Based on login durations of 30 seconds to one minute, this implies roughly 15 to 30 logins daily.
To be conservative, let’s assume the lower end: 15 logins per day. With a global population of 8 billion and 85% having smartphone access—representing devices requiring logins—we can make a very rough estimate.
Global daily logins would thus amount to 0.85 × 8 billion × 15 = approximately 102 billion logins per day, or about 1.2 million logins per second.
2. Cost and Scalability Issues
Ethereum, one of the most popular blockchain platforms, can handle only about six zero-knowledge proof verifications per second. To replace traditional login systems entirely with blockchain, we’d need nearly 200,000 Ethereum-like blockchains operating simultaneously—without even accounting for other transactions occurring on these networks.
In short, blockchain in its current form lacks the scalability to manage even a fraction of global daily authentication demands.
But capacity isn't the only issue. The cost of verifying logins on a blockchain like Ethereum could be prohibitively high.
For a baseline scenario, assume each login requires the absolute minimum gas cost of a transaction on Ethereum: 21,000 units. Let's break this down assuming a gas price of 5 gwei, where 1 gwei equals 1/1,000,000,000 ETH.
This means that 240 million daily login verifications, each using 21,000 gas, would cost approximately $60.5 million per day when ETH is priced at $2,400.
More critically, all of this cost would be consumed within Ethereum—with no party in the network earning any revenue from it.
This is unsustainable.
The cost of login cannot be compared to the cost of validating transactions on a public ledger. While blockchain’s decentralization offers high security and transparency, its financial premium makes it impractical for website logins.
3. Splitting the Difference
Nevertheless, zero-knowledge proofs (ZKPs) offer a glimmer of hope amid this bleak outlook. ZKPs allow users to prove their identity without revealing any sensitive information.
In today’s world, personal data is scattered across thousands of databases, each a potential target for hackers.
Theoretically, blockchain-powered logins using ZKPs could usher in a new era of privacy, rendering passwords and usernames obsolete.
But theory and practice rarely align so perfectly. While ZKPs can address certain privacy concerns, they introduce others—namely, high computational resource requirements and the current high cost of verifying these proofs.
As previously mentioned, Ethereum struggles to meet these demands. Although other blockchains like zkVerify are working to drastically reduce costs, the technology is not yet ready for widespread deployment.
Beyond technical hurdles, there's also the challenge of user experience.
Most internet users are not cryptography experts, so any new system must be as convenient as the current "username-password" model—even with its flaws.
User experience cannot be overlooked.
Technical superiority does not guarantee mass adoption—Linux is a prime example. For an industry to succeed, both elements must be combined.
Although logins should not incur direct costs, they often do—hidden within the services we use.
Worldcoin offers a blockchain-based login solution, using iris scanning to generate users’ zero-knowledge proofs, verified on the Optimism blockchain.
While each login costs just $0.0033, scaling to 240 million daily logins results in $800,000 in daily expenses—unsustainable at scale.
This represents a 98.5% reduction compared to Ethereum, but the system operates on a different, more centralized layer, trading decentralization for scalability.
In contrast, cloud-based alternatives like AWS Cognito are far cheaper, costing $0.0025 per user per month—making blockchain solutions over 98.5% more expensive.
Clearly, blockchain-based logins still have room for improvement. So where do we go from here?
Blockchain possesses the ingredients to disrupt login systems—even if a clear implementation path hasn't emerged yet. With ongoing improvements in cost efficiency and scalability, particularly through zero-knowledge-driven Layer 2 solutions, we may be approaching a tipping point.
Currently, blockchain systems struggle to compete with low-cost, high-speed infrastructures offered by cloud providers like Amazon and Google—but the balance is beginning to tilt in favor of blockchain.
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