Blockchain technology has momentum. Bitcoin and Ethereum ETFs have catalyzed mainstream entry into the crypto investment space. Meanwhile, DeFi and other decentralized projects continue to grow their users and assets. Regulators in many jurisdictions appear to be looking for ways to work with the technology, rather than against it. This all boils down to an unprecedented moment of opportunity for those developing projects based on blockchain technology.
We’re at risk of squandering it.
The blockchain community has always been marked by a kind of “wait till next year” optimism. We thought once Ethereum moved to proof-of-stake, in 2022, we would solve the scalability problem and open the door to widespread adoption. Similarly, there is an assumption that once the regulatory situation is clearer, institutions will come into the space en-masse. Then the bright, decentralized future will finally arrive.
But it won’t – not on the industry’s current path. Just as communism collapsed because it never delivered its promised utopia, so will crypto if the community doesn’t change its thinking.
This would be a tragedy.
Blockchains are technical marvels. But the current state of blockchain development is equivalent to giving the world the iPhone with only the Notes app. Or perhaps more aptly, only equipped with a few betting apps that are maddening to use but potentially highly lucrative. It’s no wonder we haven’t won over regulators or the broader public.
Two things are holding blockchains back from achieving their potential. One is a perception: most people outside the crypto space still believe the technology is purely about digital money and derivative financial platforms: essentially bitcoin, dogecoin, and the exchanges where they trade.
This perception is driven by the second obstacle, which is substantive: blockchain projects have focused too heavily on financialization. This has led not only to a vast underutilization of the capabilities of the tech, but also to an insider-first, semi-closed ecosystem in which small groups of people design, develop, and use these platforms.
Blockchain technology is touted as tearing down gatekeepers and extending the benefits of finance to all. So it is the height of irony that it should come to be dominated by an even smaller and more impenetrable group of elites than the legacy finance and government structures it seeks to replace.
The key to slashing this Gordian Knot is to rediscover what blockchains are really about: not money, but time.
A blockchain is, fundamentally, a clock. It records when transactions take place in a transparent and untamperable way. This is the key to its potential: in a world of declining trust, this blockchain clock can serve as a universal source of reality.
Every transaction in blockchains carries within it the answer: who did what, when and why. It is something that is provably true and does not require a person to trust the bearer of the information. Time waits for no one. It does not ask for trust, and it goes on whether we trust it or not. Time is the ultimate trustless key to our lives, and so, as clocks, are blockchains.
That is its transformational power. There is almost no limit to the things we can build if we understand what blockchains are really for. We can build systems that can offer advantages over legacy infrastructure developed before the invention of jet-powered aircraft. We can deliver a world that is fairer, faster, and more lucrative.
But, today, outside of a few financial products, we don’t. True, there are crypto projects that allow people around the world to overcome runaway inflation or political repression. These stories should be celebrated and supported, but they remain edge cases. For the most part, blockchains today are the foundations of an arcane, semi-exclusive universe of financial products where those in the know seek outsize returns on their capital.
It’s time – pun intended – to reclaim the true purpose of the blockchain. That will require all of us – developers, founders, VCs, evangelists – to rediscover the original ethos behind decentralized infrastructure. It will require us to remember that blockchains are really about time, not money.
With this understanding, the industry can start to deliver essential products for real people. After all, the thing that truly holds crypto back isn’t the SEC. It’s not internecine squabbles between different factions of Ethereans. It’s the simple fact that crypto remains irrelevant to most people.
If the government tried to ban e-commerce sites like Amazon, there would be an outcry. People from schoolchildren to grandparents would oppose such a move because it would make their lives materially worse. When governments attempt to block social media platforms like X and TikTok, they face severe backlash from the millions upon millions of people who use those services. Public support is strong for these platforms even when they arguably facilitate harmful activities.
But crypto? No one really cares. Crypto’s main defenders are those funding, building, and benefiting from its complex financial platforms. But these entrepreneurs and investors have primarily succeeded in driving two things: market cap and public skepticism. Not only would most ordinary people not care if crypto disappeared; they wouldn’t even notice.
This is a dire state of affairs, and the reason for it is simple. We’ve forgotten why we believed in decentralized technology in the first place, and gone down a path of financial opportunism and insiderism.
The good news is it’s not too late. We need to look past the allure of financialization and remember that blockchains, as universal timekeepers, can do so much more. The possibilities are almost unlimited. We can enable strangers on different continents to share information and ideas securely, transparently, trustlessly. We can use our favorite apps that have become essential to our lives – but without the anxiety that we might be tracked and listened to. We can chat with strangers on the Internet and enjoy online news with full certainty that it is humans and not bots that we are interacting with. We can rethink money, supply chains, auctions, transportation, corporate voting, and almost everything else. We can make sure promises are kept. We can make blockchains truly indispensable for people around the world.
Note: The views expressed in this column are those of the author and do not necessarily reflect those of CoinDesk, Inc. or its owners and affiliates.