One idea that just won't die is that blockchains are great for crime. I hear this on a near weekly basis from outlets that provide otherwise insightful coverage. This is a holdover from the early, Wild West days of crypto when all anyone knew was that people used Bitcoin to buy drugs on the internet. The general perception was that criminals chose cryptocurrency because it enabled anonymous, untraceable payments. But, that was certainly untrue back then, and it's still mostly wrong today.

Let's start with Bitcoin. Bitcoin is a shared, public ledger that leverages public key cryptography to allow users to transact pseudonymously—all this means that when Bob sends money to Alice, instead of seeing these names, we would see something like: 1bc1qxy2kgdygjrsqtzq2n0yrf2493p83kkfjhx0wlh sent 5 BTC to 3J98t1WpEZ73CNmQviecrnyiWrnqRhWNLy. Computers (also called nodes) in the network, running Bitcoin client software, listen for transactions and verify basic facts: Bob really signed this; he has enough Bitcoin and isn't trying to double-spend (pay Peter and Paul with the same Bitcoin). Then each node constructs a candidate block (a bundle of transactions), and engages in a mathematically challenging puzzle to find the magic number that will allow them to include this block in the final ledger. Peer nodes validate proposals, verifying that they adhere to the rules of the network, and if all checks pass, they add the new block to their version of the chain. If a node proposes a bad block, e.g. one containing an invalid signature, his peers will reject it, and he will have wasted his computational work. Sometimes there are conflicting ledgers (forks), and in Bitcoin, the rule is that the longest chain wins. So, eventually one ledger adds blocks faster than another, and everyone agrees that it's the official record of account. This process is called consensus, and Bitcoin's consensus algorithm is called proof of work (PoW).

Different blockchains follow their own sets of rules and dispute-resolution mechanisms, and many have dropped the Bitcoin number-guessing game for more eco-friendly consensus algorithms. But, the basic pattern is the same: computers work together to construct a shared ledger based on some set of rules. While there's been progress on privacy-preserving protocols, crypto is still mostly public, and this shared ledger provides an immutable audit trail, a complete history of who did what when. This is not ideal for criminals. X (formerly Twitter) personalities like ZachXBT and YouTubers like CoffeeZilla regularly analyze public blockchain data to expose scams, and there are major firms that help law enforcement to do the same. So, what was once known as a dark and indecipherable, criminal bazaar is now understood to be more like a fruit stall—operating in broad daylight, in front of a police station.

Many have long suggested taking advantage of blockchain's transparency to better account for how our tax dollars are spent, and under the crypto-friendly Trump administration, this just might happen. Reporting from Bloomberg indicates that Elon Musk, as part of his Department of Government Efficiency (DOGE) mandate, is investigating using blockchain. At the height of blockchain fever, many in tech suggested we put everything on chain. So, now most people are, understandably, tired of any mention of the technology, and their eyes glaze over at the suggestion that we use it for anything at all. But, this is a place where it could actually be useful. Whether or not you approve of Musk's style, government waste is a real concern, and public ledgers could be one way to keep it in check.

This kind of radical transparency could also benefit the nonprofit sector. California provides a stark example of why such oversight is necessary. Homelessness initiatives in the state have received massive amounts of funding but have, thus far, proven ineffective. The situation continues to deteriorate, and every year there are more people on the streets. Despite this, executive compensation at some of these organizations can be eye-watering, and this has drawn increasing scrutiny around how they choose to allocate their resources. Real-time, public accounting of NPO spending decisions could do a great deal to reassure Californians that their donations are being put to good use.

Trust is in low supply these days, and we're witnessing the simultaneous failure of both open and closed systems. The internet was meant to be our great library, a democratic repository of knowledge open to all. But now our feeds are full of AI slop, and it's harder than ever to tell fact from fiction. Meanwhile, traditional institutions, gatekeepers of yore once trusted with the facts, have also lost credibility. Most Americans do not trust the media or their elected officials, and this trend is worsening. They think the media is biased—that reporters wear ideological blinders and practice access journalism—and they see legislators self-dealing, using privileged information to insider trade their way to millions. It’s like the priests skipped town with all the nice chalices, and we’re left wondering if they’ll ever come back—if we even want them to.

Given this serious crisis of faith, we should explore all avenues to rebuild trust, and blockchain technology offers a practical path forward. Blockchains were once mischaracterized as shields for criminal activity, but they’ve proven to be remarkably transparent and could become a powerful instrument for accountability in public spending. Today the technology is mature enough to interface with the legacy banking system while avoiding any major disruptions, like forcing contractors to set up crypto wallets. Government agencies and nonprofits can spend stablecoins, tracked on a public ledger, and counterparties can receive bog-standard dollars in their bank accounts. We, the public, would get verifiable ground truth, an indelible record of every tax dollar spent.

Contrary to early hype, blockchains are not a panacea; they won't solve all our woes and bring about world peace. But, in this time of eroding trust, they can be a useful tool to help us understand what is true and, in doing so, foster more informed, productive discussions on how to wisely and efficiently deploy our limited resources.