Trust in Trustless Environments

As the Web 3.0 is being built, terms such as trustless (no middleman), censorship resistance and decentralization often come by, as an evolution from the current status quo, which is based on third party trust, rampant censorship and centralized control.

An evolution it can be, a reaction it certainly is, but there is still a lot to be built.

Let's talk a bit about the idea of trustless transactions, or now even smart contracts (defi, for example).

What trustless wants to say is that you don't trust a middleman, an intermediary, a fiat custodial service (like a bank, a credit card company etc.) to transfer funds from one customer to another. You can do it without the middleman in the cryptocurrency world!

^Source

But that's not trust****less**. That's more trust. Instead of trusting one third party, you now trust multiple third parties (block producers) to agree on your transaction. The chances of these multiple third parties colluding to steal your money is lower than one central third party taking the decision by itself.

In the case of bitcoin you trust the miners they will include your transaction in a new block. In the case of Hive, you trust the witnesses to do the same.

One is a proof-of-work protocol with thousands of nodes worldwide, the other always has 20+1 elected witnesses whom we trust to keep the Hive blockchain safe and properly working.

What about other types of trust?

We trust developments will keep being released and that the developers are well intended. The more open-sourced and decentralized the system, the easier it is to check on the work and replace devs going MIA, or to recover if they become rogue.

Especially when money is concerned, we trust the code has been thoroughly tested... or we assume a high risk for potentially higher rewards.

Here in the Hive ecosystem, some of us trust one or a handful or persons to grow our passive income. That can be quite lucrative, but also quite risky, due to the centralization.

Back in the old blockchain days, we also trusted the exchanges to play fair, and not use the funds of their customers to influence governance on the blockchain. That was a misplaced trust. And now we have failsafe mechanisms on Hive to prevent (warn us) in case of a similar intention, way before it materializes.

We also trust oracles and aggregators to report the information correctly and updated. I believe in enough cases this is a misplaced trust. In some cases it can be done something about it, in others not so much at this point, as far as I know.

Conclusion

There's plenty of trust involved in the so-called 'trustless' environments.

In most cases, that's a good thing, because more (decentralized) trust = more security in those cases.

But there are other types of trust we place on various actors from the cryptosphere. Sometimes from lack of better alternatives at the moment. Other times we give up some security for the sake of scalability. Tradeoffs in a rapidly developing new world...