*https://www.preethikasireddy.com/post/what-do-we-mean-by-blockchains-are-trustless*

Preethi Kasireddy, February 2019

Many of us are guilty of describing blockchains as “trustless” systems. However, I’ve come to realize that the term “trustless” is ambiguous, confusing, and most importantly, inaccurate.

Blockchains don’t actually eliminate trust. What they do is minimize the amount of trust required from any single actor in the system. They do this by distributing trust among different actors in the system via an economic game that incentivizes actors to cooperate with the rules defined by the protocol.

Let me explain in more detail.

A truly trustless transactional system would look something like this:

Two people who are interested in transacting with one another change hands directly. They are physically present, and therefore can easily verify

1. Authenticity: the actual sender is handing over the money, and
2. No double spending: the money is not fake, it’s a real $10 bill

While theoretically flawless, this transactional system is limited. Consider: two individuals may trade with one another only when they are in close physical proximity. For economies to function at scale, a transactional system should enable transfers with anyone in the world, regardless of distance.

So, what we really want is this:

As you can see from the diagram above, the way we achieve this aim is by having an intermediary who can facilitate the transfer of value to make sure that the actual sender is sending the money and the money is real.

This begs the question: who serves as the wholly trustworthy intermediary?