Understanding Blockchains: A new form of public infrastructure
This post is part of a series on how everyday investors can understand blockchain networks like Solana, Ethereum and Bitcoin.
When we think about financial infrastructure, we usually think of banks, brokerages, and payment networks. Institutions like JP Morgan, Fidelity, and Vanguard might come to mind. We use them to hold our assets, track our assets, and help us invest to secure our financial futures. We trust them to store our assets safely and operate in our best interest.
Blockchains serve a similar role, but in a fundamentally different way. They are purpose-built financial ledgers designed for the digital world. Instead of relying on centralized institutions to track balances and ownership, blockchains maintain a shared public ledger that anyone can verify. These ledgers are secured by cryptography and operated by decentralized networks. The result is financial infrastructure that is open, transparent, available 24/7, and globally accessible.
At their core, blockchains are designed to do one thing extremely well: keep track of assets. They provide a common financial layer for payments, savings, trading, and settlement. Just as traditional banks and exchanges rely on internal databases to track balances and trades, blockchains provide a global ledger that records who owns what and where it moves. But instead of being closed and proprietary, this ledger is public and verifiable.
Self-Custody
One of the most powerful features of blockchains is self-custody. In traditional finance, your assets are held by institutions on your behalf. While this is convenient, it also means you ultimately depend on intermediaries to access and control your assets. If you wanted to move money from a bank or brokerage account, it would require the institution to execute that action for you. Account restrictions, withdrawal limits, settlement delays, and operational failures can all affect your ability to use your own assets.
On blockchains, individuals can directly hold and control their assets using cryptographic keys. You can think of these keys like a username and password. Ownership is enforced by software and mathematics rather than corporate policies or the law. This is similar to holding physical cash or gold, but in digital form. You can store, send, and receive value without needing permission from a third party. Self-custody gives individuals direct financial sovereignty, allowing them to interact with global markets on their own terms.
24/7 Trade and Transfer
One of the most important reasons to tokenize assets is 24/7 trade and transfer. Unlike banks and brokerage accounts that close on weekends and holidays, blockchains are always running. Blockchains natively allow transfers from one address (account) to another. This means that if you have someone's address, you can send them money at any time, from anywhere in the world. On modern blockchains, these transactions settle in fractions of a second and often cost just pennies. There are no banking hours and no waiting days for settlement.
Because blockchains are always running, so are all the protocols built on top of them. Many of these protocols allow you to trade one asset for another directly onchain. You can swap USDC for BTC, SOL, or any other digital asset whenever you decide. This is true for any asset that lives onchain.
In traditional finance, trading is limited by market hours and you need to go through a brokerage. On blockchains, you can trade whenever you want. Nights, weekends, holidays, it makes no difference. This means that assets on blockchains are always liquid and always movable. The permissionless nature of blockchains, combined with their guarantee of continuous operation, means that at any moment you can take action on your assets. You are only bound by the rules of the blockchain network.
Transparent and Immutable by Design
Another defining feature of blockchains is transparency. Traditional financial systems rely on private databases that are visible only to institutions and regulators. Users must trust that balances are correct, transactions are processed fairly, and risks are properly managed. This lack of transparency means that these ledgers can be changed. This is very uncommon, but still possible.
On blockchains, every transaction is recorded on a public ledger that anyone can inspect. Balances, transfers, and financial activity are all visible and verifiable in real time. This creates a radically transparent financial system, where trust emerges from open verification rather than institutional reputation. Blockchains, by nature, are immutable. Using cryptography, once transactions have been added to the ledger they can't be removed or changed. This means that the record of transactions is provably accurate at all times. Transparency and immutability become a built-in feature of the infrastructure, not something layered on afterward.
Conclusion
In simple terms, blockchains are financial infrastructure designed for the internet age. They provide programmable, always-on, and globally accessible systems for holding and transferring value. Just as the internet changed how information moves, blockchains are transforming how finance works. By combining self-custody, continuous availability, and unprecedented transparency, blockchains offer a fundamentally new model for financial infrastructure, one that is better aligned with the needs of a digital-first world.