Should blockchain be a single purpose?

This is a segment of the breakdown newsletter. To read other editions, Subscribe

A great business starts as a female, not a Swiss Army knife.

By choosing one thing, the company is more likely to be better at that one thing. Customers are more likely to know what they are doing.

For example, this is the Yahoo homepage from around 1999.

There’s a lot going on, including search, auctions, news, email, instant messaging and more.

This is the Google homepage, circa 1999:

It’s easy to see why it proved to be a winner. The single purpose website revealed to users what Google is doing and revealed that Google is very good at doing it.

The fact that the lowercase “Google” is a verb and Yahoo is not doing anything more important than hosting my fantasy baseball league is evidence that being good on one thing generally beats average on many things.

Does that apply to blockchain too?

Bitcoin is a single purpose chain, and it is just to send Bitcoin – its simplicity may be the main reason it was such a success.

But Ethereum and Solana are also general purpose chains, and they have also achieved some success.

Also, neither approach appears to have invaded the other. Bitcoin has so far failed, and Ethereum has not been able to make money so far.

So, can both approaches coexist peacefully?

General purpose chains will soon have new, single-minded competitors, so it may be too early to answer.

Last week, Stripe and Paradigm officially announced the development of a blockchain Tempo, focusing on Stablecoin, which feels like an instant favorite to win a new Crypto Payments business.

Tempo is built specifically for Stablecoins and offers predictable fees (paid in the stable rather than the native token), myopia finality, “opt-in” privacy and compliance features, “lanes” and “lanes” only, and high throughput.

Matt Huang, the leader in Tempo’s development, suggests that narrower and more concentrated will lead to faster development of the chain.

Calling such Ethereum might suggest that tempo has ambitions beyond payment.

Perhaps Huang says that while Tempo starts with a set of allowed Validators, the chain will be “unpermitted” from day one, and “more decentralized from there.”

A fully decentralized, permitted blockchain that is excellent for payments is very similar to what a generic blockchain requires.

Can tempo pose a threat to Ethereum and Solana in everything, not just in payments?

Google’s example suggests that it is possible. They beat Yahoo in searches and then expanded horizontally to email, cloud computing, smartphones and self-driving cars.

There are a few such examples. Microsoft was basic, Amazon was just a book, Apple was just a PC, Southwest Airlines was just a Texas.

However, there are also rebuttals.

To name one name, a single purpose calculator was better suited to do mathematics faster than a general purpose computer, but who owns it now?

It’s more likely that there’s a Swiss Army knife in the drawer somewhere than a Texas instrument calculator.

So, if a general purpose computer makes the calculator unnecessary, then the general purpose blockchain could ultimately eliminate the payment blockchain.

Max Resnick predicts that it is predicting a “decentralized blockchain.” He predicts that it is “better than centralized in every way.”

If so, Tempo could have fired a starting gun in the race to make the generic chain super-fast before the ultra-fast single-purpose chain was decentralized.

This may be a race without a finish line: it may be impossible to be decentralized for both and Optimized for payment.

Mert Mumtaz, for example, believes that Tempo is not even a blockchain, not to mention generic.

In Mumtaz, the blockchain is decentralized by definition. Additionally, decentralized blockchains are generic by definition.

Tempo says they will advance towards decentralization.

But Mumtaz believes that inevitably floods the chain with something frivolous like fartcoin, clogging things and slowing down the chain’s performance in payments.

There are only two ways to become a payment chain, he says.

One is to make the chain “not Turing” like Bitcoin “can’t do anything but send money.” The other is to “allow chains.”

If so, Ethereum and Solana can easily rest so they don’t become yahoo on Tempo’s Google.

But what happens if Tempo gets all users None Will it be decentralized?