The ongoing debate in the crypto industry centers on whether blockchains should be single-purpose or multi-purpose. This discussion influences funding strategies, regulatory approaches, and leads to specialization in applications.
Central Figures: Bitcoin and Ethereum
Bitcoin, Ethereum, and Solana hold a central place in the discussion regarding single-purpose blockchains. Discussions among developers suggest that blockchains should focus on specific applications. Analyst Byron Gilliam advocates for blockchains to have clear strategies, similar to those observed in broader ecosystems.
Impact on Funding
The choice between single-purpose and multi-purpose blockchains significantly affects venture funding and developer focus. Solana's specialized approach in the payments sector is attracting increasing attention. Single-purpose blockchains may offer greater efficiency and lower costs, while multi-purpose chains provide a wider array of applications.
Lessons from Yahoo and Google
Previous attempts to create multi-use technologies often resulted in a diluted focus, reminiscent of Yahoo's broad strategy versus Google's search specialization. Current trends indicate that specialization is essential for success, as seen in the debates surrounding the Ordinals controversy in 2023.
> "Great businesses start as scalpels, not Swiss Army knives. By choosing one thing to do, companies are more likely to get great at that one thing — and customers are more likely to know that’s the thing they do... Bitcoin is a single-purpose chain — all it does is send bitcoin — and its simplicity might be the main reason it’s been such a success." — Byron Gilliam, Analyst, Blockworks
The debate over the nature of blockchains remains crucial for the future of the crypto industry, impacting project strategies and funding approaches. Specialization may prove to be a significant factor in achieving success in this domain.
