Blockchains for non-cryptocurrency applications (still) don’t make sense
Author’s note: originally published in 2019, revised January 2026. Having witnessed the NFT and crypto boom and bust of 2021, these arguments have only grown more relevant.
Why blockchains work for cryptocurrencies
Blockchains work for cryptocurrencies because the asset being traded is the blockchain record itself. When you “own” Bitcoin, what you actually own is a cryptographic entry on a distributed ledger stating that your private key controls a certain amount of Bitcoin. This record is signed by the previous owner, verifiable all the way back to the block that originally minted those coins.
This system is self-sufficient because we’ve collectively agreed that the blockchain record is the thing of value. When you sell cryptocurrency, you sign a new record transferring control to someone else’s key and publish this on the blockchain. The buyer verifies this record and its...