I think they can and will be incredibly useful for digital trade, but too many people are trying to make rigid secure digital systems represent the squishy nondeterminism of analog law. Fundamentally, you can't keep an accurate ledger, because there is no interface for proving ownership of physical items.
If someone challenges your ownership of property, you bring your papers to court.
The same thing could work for cryptoassets: you have a centralized, trusted system for validation of custody of assets, and then its share distribution is handled on the blockchain.
The main issue is dealing with a 'fork'. If Person A has the private key that 'possesses' an item, but the courts say that Person B is the rightful owner (and physically transfers it to them), how do you securely fix the chain?
If person A cannot or will not be compelled to transfer the cryptoasset with their private key, then the chain now has incorrect and uncorrectable information on it. If some records on your chain are not trustworthy, trust in the whole chain breaks down.
The only fix is requiring a centralized backdoor, at which point you might as well just use a non-blockchain database.
And that can be used in conjunction with a server-side process to give a client some benefit of server-side processing. e.g. Player A has sword "X" in their inventory.
- Spend a cryptotoken as the cost of creating a forum account to fight spammers or malicious users.
- Only stream this video to people who have signed a message with a privkey that controls a token which corresponds to the video. Use steganography to encode privkey into stream, so if they release it publicly, their access rights can be stolen.
- Concert tickets that can be validated and transferred on a blockchain would also be cool, but maybe a bit heavyweight and unnecessary. Have trust when buying ticket from a scalper that it is real and valid, transfer to your own privkey so it can't be sold twice.
All of this is complicated by regulatory uncertainty, though. No way that any of these are economically viable if you have to deal with AML on every transaction, and it's not clear you can transact in non-monetary cryptoassets without being liable for following money transmitter laws.