Imagine we lived in a simulation where time itself worked like Bitcoin’s block-time.

There is some cosmic consensus process, with an analogue of proof of work, and a “tick” of the clock only occurs when a certain procedure succeeds and a block is “mined.” In this picture, reality advances in discrete steps, one block at a time.
But this does not actually solve any of the conceptual riddles associated with time. The proof-of-work process, the causal interactions that lead to a block being produced, and the physical steps required to carry out that computation would still have to unfold in continuous time and outside the blockchain itself. You’ve just moved the problem one level up.
If you then invoke yet another “blockchain universe” that regulates the time of those processes, you’ve created an infinite regress. Nothing is explained; the question is simply deferred. At that point, the explanation collapses into the classic cosmological non-answer: it’s turtles all the way down.
So even in this hypothetical block-time universe, you haven’t explained time — you’ve only wrapped it in a different protocol.