Bitcoin is an independent currency and payment system, where users are in full control of their assets. Satoshi Nakamoto — the mysterious person or a group of persons behind Bitcoin – laid the foundation of a financial revolution. Nakamoto combined what’s barely combinable: security, transparency and independence.
The Bitcoin accounting system is completely opened for everyone. However, no one can steal someone’s funds or do anything against the rules, because the parameter of trust between users (regular people) is completely eliminated. This is achieved by means of simple math (not that simple, actually). That’s all true. But…
What if you’d hear that even the most decentralized and far-reaching blockchain-based system, which is Bitcoin today, initially relies on trust relationships between people? In order to get things clear, let’s dream up an unconventional, in the context of Bitcoin, example.
Let’s imagine an alien invasion. The extraterrestrials turn out to be cool folks coming with peace. In the process of sharing experiences, we, Earth people learn that flying saucers are a complete nonsense, while conventional aircrafts are much more practical. Aliens, however, have not heard of Bitcoin. They get so excited about the idea of an independent digital mankind-currency that they copy its initial code, establish a superfast communication channel between Earth and their planet and fly away.
Alien scientists immediately grasp the idea. They synchronize with the Earth network, create and put their mining equipment into production. Who could have thought that someone will eventually provide a tough competition for the Chinese…
Little by little, aliens start proposing some quite intelligent network updates that can significantly improve the capacity, security and privacy of Bitcoin. Initially, Earth scientists are able to understand the alien mathematics and prove its trustability. However, each new update comes hundreds, later thousands of times more advanced than the previous one and, very quickly, even the most brainy Earth mathematician can no more understand what lies behind the improvements.
If scientists on Earth are unable to figure out the underlying basis of changes in Bitcoin — all they can do is to simply trust the aliens, which doesn’t sound like an option really. But if you expand this idea, you’ll come to a conclusion that regular people (not the developers who can, themselves, verify the correctness of Bitcoin upgrades) are in the same position as the brightest scientists on Earth, who are unable to make sure that the network is secure, so the only thing they can do is TRUST.
It’s obvious that if the Alien situation really happens, people will leave Bitcoin behind. Because we do not trust aliens. But, we trust each other and this is specifically the reason why Bitcoin is alive and well.
People trust people — this is the basis of our ‘trustless’ relationships in Bitcoin.
A short example. Before updating the software of a device, people either rely on the trust on software providers or opinions of experts that authenticate this specific update, but can never be 100% assured.
Bitcoin Relies On Experts
If we look at an overall situation, we’ll see that regular people are at the very bottom of the hierarchy. That said, dwellers at the top are at least three groups of experts who participate in the development of integral components, which are necessary for Bitcoin operation. In between, there are IT specialists who are competent enough to verify the quality of the product and grant it to end-users in the form of certain services. Now, let’s give further consideration to the top level:
- Cryptography experts. Algorithms and proofs of their strength.
- Software experts. Software core of the devices we use to interact with the network. Ex: smartphones, hardware wallets, etc.
- Hardware experts. Exclusively the iron core of the same devices.
Usually, groups of these experts don’t even interact with each other. Meaning that trust factor exists even on the peak of the hierarchy. Each group of experts is usually only competent in their own field.
Not to speak of the end users who entirely trust the opinion of experts, or friends of experts, or friends of friends of experts. So, in order to join the trustless environment where confidence is guaranteed by mathematics, you should first entrust those who’ve built this mathematics and all the companion software and hardware that lets you interact with it.
We believe that the Earth is round because of exclusively one objective argument: It’s a well-known fact proven by many science experts (in fact, it’s the people who we don’t even know). If you cast this argument away, there’s practically no way you can prove that the Earth is not flat.
This leads to the idea that even the evidence-based science requires trust. While the prove can only be reached by means of scientific consensus. Does this remind you of anything?
Scientific consensus has a lot to do with decentralization:
- A research technique is being described
- Later, exploration is being conducted
- Results and the course of the study are published in the open source so that experts from all around the world could verify its authenticity.
- In case an n-number of experts reach consensus regarding the research investigation — it may be considered a proven fact.
Obviously, this process excludes regular people. So, whatever standardized the process of research practice would be, there’s always the matter of trust beyond it.
You wouldn’t believe an alien that flew over on Earth and said that it revolves around the sun because, from your point of view, the Sun is revolving around the Earth. Still, we trust our scientists who claim this.
Imagine you suggested your mother to keep all her savings in Bitcoin and she agreed. Who do you think she trusts: Satoshi Nakamoto, Bitcoin Core developers, or you? The answer is obvious.
So, it is more proper to consider Bitcoin from the perspective of a social consensus, the result of which is backed up by mathematics. The consensus can only be reached among people who trust and understand each other.