Universal blockchains under real-world needs

Comment by: Steven Pugh, founder of Taraka

Vertically, the same pattern appears over and over, and has nothing to do with centering. Businesses rush to blockchain solutions to solve their day-to-day dreams – only to find that Ethereum and Solana can't really help them.

Check out the construction foreman who approved a last-minute design change with a quick phone call, only to be sued six months later by the client who never agreed. Or consider an equipment rental company that sees its revenue share evaporate as customers dispute a sensor that shows machine usage — data that could be tapped before the ban arrives.

We see this pattern repeated across various industries, where misunderstandings are the main driver of pain relief adoption. In property rentals, for example, disputes arise over how properties are used, what you're getting, and whether sensor-collected data is changed. In construction, disputes often occur with frequent and urgent changes to pre-approved construction plans, which creates confusion and leads to costly lawsuits later.

General-purpose blockchains have reached their limits for solving real-world problems. In every industry where decentralized networks can be useful, there are clear technical incompatibilities between what general-purpose chains offer and what specific verticals actually want. So founders are building their own unique layer 1 instead.

Industry-specific disputes require simpler blockchains

Disputes in construction and similar industries are frequent and expensive. An on-chain audit trail of “who's there when” can fix handshakes through informal texts and calls, greatly reducing litigation.

Audit trails – essentially, signed messages – are inherently stateless. Each message added to the network has no effect on previous or subsequent messages. These are not financial transactions that require tracking balances, solving problems that take twice as much time, and having cryptographic identities to prove anything. The only important properties are an order to form an immutable and ironclad sequence of events.

Pinning stateless messages onto the blockchain is important because it does not require the full verification machinery that Ethereum provides. There is no need to verify complex cryptographic signatures and smart contracts for each entry; These messages can be taken to a persistent state in parallel.

As any audit trail uses case scales, founders would be wise to build their own unique Layer 1. Since there is no asset to steal, most of the signature verification can be skipped, saving significant processing power. No smart contracts means eliminating Ethereum's notoriously slow virtual machine. Stateless messages can be executed in parallel quickly, as they avoid conflicts between parameters.

These improvements can dramatically improve network speed and responsiveness—all without sacrificing the security or decentralization necessary to ensure “who's there when.”

Financial regulations break the entire blockchains

While construction requires less complexity, traditional finance requires more oversight—in particular, regulatory oversight that general-purpose blockchains aren't designed to provide.

As decentralized finance becomes mainstream, traditional financial institutions are increasingly placing real-world assets (RWAs) – including fiat currencies and securities – onchain. The problem is that these non-crypto native resources are heavily regulated everywhere in the world, and those regulatory restrictions have technical implications that Ethereum cannot handle.

Related: Do you call it decentralized? Layer 2s is destroying crypto.

Regulators add foolproof functionality at the basic blockchain level to ensure maximum compliance. Know Your Customer (KYC) rules will soon require blockchains to have locally built relationships with licensed off-chain KYC providers, ensuring that each address corresponds to a verified identity. Anti-Money Laundering (AML) and sanctions requirements require that every wallet and every asset be blacklisted, blocked and blocked and all transactions reversed. Even the computers running these blockchains can be considered securities brokers or money transmitters, requiring special financial licenses and making these networks completely private and permissioned.

All these regulatory functions should be included natively in the agreement protocol to ensure maximum compliance. Since none of this is possible on a general purpose layer 1, financial institutions have had to build their own – and they were fast.

A few notable examples include JPMorgan's Kinexys for interbank settlements, Stripe's Tempo for payments, and Robinhood's arbitrage-based Layer 2 for onchain securities. As mainstream institutional adoption grows, these regulated and permissioned blockchains will become increasingly prevalent in the crypto space.

Generic layer 1 is not going anywhere.

The obvious question is: If every industry builds its own blockchain, aren't these smaller networks vulnerable to attacks?

Generic layer 1s, especially those with significant levels, can still play a critical role as security anchors for these industry-specific custom blockchains. A few large-scale networks – Bitcoin and Ethereum – have a huge number of participants, node operators and onchain financial interests, which makes it very difficult to compromise. This is in stark contrast to smaller, more vulnerable industry-specific chains.

These specialized networks may use Ethereum, for example, to pin current snapshots that prevent historical rewriting, include ETH as part of their demand, or use Ethereum to resolve disputes by replicating transaction histories. Think of them as specialized blockchains that manage day-to-day operations while periodically checking in with Ethereum for security backups.

This solves the contention problem in an unexpected way: specialized chains can be tailored to the specific needs of their industry – whether that's simple audit trails or complex regulatory compliance – while still maintaining strong security guarantees by connecting to established networks.

As mainstream adoption accelerates, most industry-specific use cases today are not addressed by one-size-fits-all Layer 1s, but they can help strengthen the security guarantees of industry-specific networks. Purpose-Built Blockchains – Each of them helps solve problems in construction, from solving their problems in construction. Regulatory Compliance – Relying on Ethereum and Bitcoin to strengthen their security.

Comment by: Steven Pugh Co-Founder of Tarax

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