Is blockchain good for anything beside finance?

If you’re not familiar, Farcaster was founded by Dan Romero, one of Coinbase’s early employees, and allows users to share various content via a Twitter-like timeline. The project had the lofty goal of breaking up the data monopolies of platforms like Facebook by offering a decentralized alternative, where users retain control of their data and identity.

Despite its billion-dollar valuation and some influential backers, Farcaster has never built a meaningful audience beyond an army of bots and a small group of venture capital fans. Eventually, the founders admitted the obvious (that no one was using Farcaster) and gave in, but with a face-saving announcement that they had arranged to “sell” the protocol to a third party. To his credit, Romero also announced that he would return the $180 million he raised to Farcaster investors.

So what happened? Some at X have pointed to the management team as the main reason for Farcaster’s failure, a claim that may or may not be justified. What He is There is clearly little appetite in the market for an encrypted social network. This is evident from the failure of previous efforts, including the BitClout scam network, and the recent decision by Coinbase’s Base to focus on financial applications rather than social applications.

All of this reflects how people might love the idea of ​​using blockchain for data sovereignty, but will actually be looking for their social media fix on X, TikTok, or Reddit. This is because these platforms are teeming with millions of users while providing a much sleeker interface than what cryptocurrency startups can conjure up.

There may also be a bigger problem for those trying to build social and other applications on blockchain technology. Specifically, the technology may not be equipped to do this, and these cryptocurrencies should stick to what they have always been good at, which is finance.

Over the course of 17 years or so, cryptocurrencies have come up with three great applications that have found themselves suitable for the mass product market: Bitcoin, stablecoins, and decentralized finance. All three work directly in the world of finance. Meanwhile, the idea of ​​using blockchain technology to transform other industries such as media or supply chains seems more far-fetched than ever — despite renewed hype around using decentralized technology to expand privacy.

As for Farcaster itself, it may mark a milestone for an earlier era of cryptocurrencies that was defined by a popular book on data ownership called Read private writing. As one observer at X noted: “With Farcaster losing its founder, Chris Dixon Read private writing The afternoon is over. Cryptocurrency is intended for online capital markets. a period.”

Jeff John Roberts
jeff.roberts@fortune.com
@jeffjohnroberts

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