Garrett’s Substack

Bitcoin is soaring again which means crypto startups are gaining renewed momentum. Let’s take a moment to highlight the legitimate utility behind crypto products and provide a framework for determining if your business truly needs a blockchain to succeed, of if it’s purely for marketing. Consider this a palate-cleanser between hype cycles.

First, when does building a product on the blockchain make sense? A few years ago I stumbled upon a comment on reddit by the user pihkal that has stuck with me. They said blockchains excel when two very narrow criteria are met:

I consider this comment very profound. If one but not both criteria are met, you might have fun building your product on a blockchain, but it is not and never will be required.

Let’s consider the case where something must be decentralized. Bittorrent is decentralized by design. If you want to download something and 100 other people already have it, why not download it directly from them? This kind of decentralized sharing works very well, and it’s become the most popular way to pirate content on the internet. Should we build a Bittorrent v2 using a blockchain? Well, let’s check the other requirement: are its participants adversarial? The answer is, no. Sure, maybe someone writes an implementation that tries to send bad chunks of data to its peers in the network, wouldn’t that be considered adversarial? Again, no, because every torrent includes an expected signature of the files being downloaded. Tamper detection is built into the Bittorrent protocol. When the signature doesn’t match the contents of a file, you can ban that one bad peer, and try again. You have all you need to ensure you’re receiving the correct data from peers in the network.

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