Satoshi Nakamoto once described Bitcoin as "a transaction system that does not rely on trust." However, the reality shows that even cryptocurrencies – symbols of decentralization – cannot be separated from the element of trust.
Here are the key points showing why trust remains essential, even in blockchain-based financial systems.
1️⃣ Does Cryptocurrency Really Need to be "Trustless"?
While blockchain eliminates centralized intermediaries, it still requires trust assumptions in many aspects.
Tether and centralized trust: The USDT stablecoin is widely used as a "digital USD". However, if Tether is sanctioned, the 1:1 value with USD could collapse, leading to panic across the crypto ecosystem.
Ethereum and censorship resistance: Ethereum is expected to maintain decentralization. But this requires block builders not to comply with censorship lists, despite pressure from regulatory requirements.
Key point: Even blockchains like Bitcoin or Ethereum – symbols of decentralization – still require trust to operate effectively.
2️⃣ Code Cannot Replace Everything
Blockchain brings transparency and eliminates much of the reliance on humans. But to operate smoothly, it still requires cooperation from stakeholders.
Bitcoin miners: We must trust that miners will adhere to the protocol instead of engaging in harmful actions like a 51% attack.
Consensus nodes in PoS: In Ethereum's Proof of Stake (PoS) system, consensus relies on network nodes. Users need to trust that the nodes will act in the long-term interest of the ecosystem rather than being interfered with.
A reminder from Vitalik Buterin: "Blockchain does not completely eliminate trust. It only shifts trust from centralized intermediaries to a distributed system."
3️⃣ Tether: Trust Can Be a Double-Edged Sword
Tether, as the most popular stablecoin, is proof of the reliance on trust.
Sanction risks: If Tether is sanctioned, the value of 1 USD/USDT may decline, causing a domino effect across the entire crypto market.
Chain reaction: An incident with Tether not only affects itself but could also lead to the collapse of many DeFi protocols relying on USDT.
Lesson: Despite being built on a decentralized foundation, Tether still carries similar risks to centralized financial systems.
4️⃣ Blockchain: Redefining Trust
Rather than completely eliminating trust, blockchain has restructured it in a new way.
Simplifying trust: According to sociologist Niklas Luhmann, trust helps reduce complexity in systems. Blockchain shifts trust from centralized organizations to transparent code and economic mechanisms.
Collaboration at scale: Blockchain creates an environment where parties can collaborate without relying on a single intermediary.
5️⃣ The Future of Cryptocurrency: Who to Trust and to What Extent?
The question is not "eliminating trust", but where to place trust and to what extent?
Bitcoin: Trusting that miners will maintain the stability of the network and not allow third parties to control mining power.
Ethereum: Trusting in the abilities of the development community and block builders to resist censorship.
Tether: Believing that Tether will successfully navigate legal risks and protect the stability of USDT.
Conclusion: Blockchain and the Nature of Trust
Blockchain is not a tool to eliminate trust, but a technology that restructures trust. It helps reduce reliance on centralized intermediaries, but still requires trust in code, miners, and the operating community.
Innovating collaboration: Blockchain opens opportunities to build a more transparent and decentralized financial system.
The vision of Satoshi Nakamoto: Satoshi did not create a world that does not require trust, but rather a system where trust is distributed more reasonably and transparently.
While cryptocurrencies are not entirely "trustless", they provide an opportunity to rewrite how we place trust – and that is the true power of this technology. 🚀
