Purpose-built blockchains

I recently shared four categories to help you analyze blockchains: scams, PhD papers, throughput maximizers, and revolutions.

This is an oversimplification.

Someone I used to work for liked to say that all frameworks are wrong but some are useful. Hopefully this one was useful despite being wrong.

One obvious thing that this approach misses: purpose-built blockchains.

Bitcoin was the first blockchain and it is purpose-built for the decentralized application known as "money." You can't run any other dApps on the Bitcoin network unless you figure out how to fit your square peg into the round hole.

This inherently opened up opportunities for other purpose-built blockchains to build other dApps. It wasn't until Ethereum invented smart contracts that a general purpose blockchain changed the way dApps launch. If you don't have to build the network yourself, then it's much easier to launch.

The problem is that general purpose blockchains all come with their own baggage. If your dApp has different needs than Ethereum can handle, you have to look at alt L1s. If you can't find a reasonable alternative, then it's time to build your own purpose-built blockchain or a brand new general purpose blockchain just for the sake of supporting the dApp you wanted to build.

This is what lead to the invention of the (now defunct) Steem blockchain in 2016 (after Ethereum). Social dApps require scalability and cost efficiency at a level Ethereum can't support. Steem accomplished something unique which is why the community and technology lives on as the Hive blockchain despite the politics that lead to Steem's demise.

Purpose-built blockchains can be very successful. By niching down, it's much easier to grow, but this will inevitably lead to people trying to leverage the blockchain to do unintended things (see Bitcoin's lightning and Hive's Hive Engine). Overall, it's a good problem to have.

-Luke

P.S. The four categories still apply to purpose-built blockchains, but you have to consider the implications differently than you would for a general purpose blockchain.