We need to stop forcing use cases on blockchains

Every industry is unique, with its own needs, quirks and customer demands. The Web3 industry is no exception — especially on the quirky front.

The prevailing mode of action in the industry so far has been to build general-purpose blockchains in the hopes that folks will later build specific layer-2 functionalities for them. But the idea that existing generic blockchains can later be molded for specific use cases lacks foresight.

We’ve made great progress with generalized blockchains like Ethereum, as the growth of DeFi and NFTs so clearly demonstrated. But that approach isn’t sustainable — scaling has been and still is one of Ethereum’s most challenging tasks.

In order to correctly prepare for the future of blockchain and shape blockchains for the future, we need to stop anchoring our thinking in what already exists. Rather than maintaining established blockchains as the blueprint for specific apps and use cases, we need blockchains that are purpose-made and use case-driven.

Be a generalist — and risk quashing innovation

The era of generalized “smart contract platforms” is coming to a close. The space is already moving steadily in that direction.

Appchain protocols like Polkadot, Cosmos and Avalanche are embracing the change in full. But even layer-2 rollups, the hottest chain narrative of the moment, are a first step towards this future of specialization. Optimism’s OP Stack is a clear contender as a framework for deploying custom EVM rollups. With time, additional capabilities beyond the EVM can be developed on rollups as well, as we’re seeing with Arbitrum’s Stylus.

We’ve observed this drive towards specialization countless times: from smartphones, computers to social media and the hundreds of different SaaS platforms catering to specific niches. We need to remember that Web3, blockchain or crypto (whichever is your nickname of choice) are all-encompassing terms for an industry that is actually made up of dozens of sectors and niches. These sectors connect and collaborate (they interoperate!), forming a cohesive whole while maintaining their distinctive characteristics and use cases.

Industry observers may point to many formerly successful companies as examples of how a myopic vision led to the demise of a number of former market leaders. Kodak, Blockbuster and Nokia all forfeited dominance to products that had better, more-attuned-to-consumer use cases with a clearer grasp of the future.

The future lies in specialization

The infrastructure for custom blockchain apps is in development, but now the burden is on app developers to start building them for their own custom uses. And this has the potential to unlock true adoption of blockchain as a means to an end — not the goal in itself.

Take the example of Bitcoin. With Taproot and Ordinals, people have been trying to jerry-rig tokens and NFTs to the poor Bitcoin blockchain, which was never even close to being designed for such uses. It’s okay if Bitcoin is just a store of value and payments blockchain. Anything else would eventually be outcompeted by a blockchain specifically built for that purpose.

In recent years, we’ve seen a true flourish of smart contract uses in the form of DeFi, GameFi and NFTs. Still, despite some undeniable success, all popular smart contract use cases involve some form of speculation, which becomes unreliable when market conditions are still infamously volatile (though secretly beloved).

The types of future applications that will use custom blockchains will be varied, but in my view, it will be much more B2B focused than before. Many such uses are currently locked behind clunky infrastructure and expensive storage. For example, a blockchain for Big Data analytics incorporates the needs of data scientists for data warehousing, SQL, verifying outputs and much more.

Imagine every industry has its own custom-built blockchain. There are already examples where this is working; IBM offers custom blockchain solutions for supply chain networks. The idea of blockchain as a sandbox for industries — from travel to IT to fintech — to build in is rapidly being adopted by some of the most established tech powerhouses.

It’s time to stop thinking about how we can mold a blockchain to a certain use case, and instead think about how to build a blockchain to fit what we’re trying to build. This isn’t always simple, and it certainly isn’t easy to convince everyone of this view.

To borrow a line from Steve Jobs, “a lot of times, people don’t know what they want until you show it to them.” It may not always work — using blockchain for your coffee maker startup is probably not wise — but it will help ambitious and creative founders to find meaningful reasons to use blockchain, the right way.

Ralf Usbeck is a German entrepreneur, founder, and chief executive of Chain4Travel, his latest venture in shaping the global travel industry with innovative travel technology. As founder of Peakwork, TravelTainment (sold to Amadeus in 2006), Vtours, and Weekend.com, he has successfully built and exited companies in a 3-digit million volume. In 2013, Ralf Usbeck received an international award as ‘Serial Innovator of Travel Technology’ at the World Travel Market in London. Today, he is pioneering the adoption of blockchain technology in travel with Chain4Travel, founded in 2021. The Swiss start-up has initiated the L1 “Camino Network for the global travel industry, enabling the next iteration of technology and the Web 3.0 age. More than 150 travel companies worldwide already support Camino Network.