Blockchain is not a trustless technology, as many cryptocurrency enthusiasts like to claim Kevin Werbach, who is a professor at the prestigious University of Pennsylvania. He talked at length about blockchain technology in a lecture for students of famed Ivy-League school Princeton and about blockchain's role in creating a trust for humanity in a way that has never been possible before.
The author of „The Blockchain and the New Architecture of Trust“ gave a lecture on how blockchain relates to trust in both the wider world and in business specifically. The technology that backs cryptocurrencies not only relies on trust, but it has given us a completely new form of trust to take advantage of.
He said that the trust offered by blockchain is totally different from what we have had up until now. He cites the recent death of QuadrigaCX CEO and the ensuing scandal following the loss of $190 million dollars on the part of 110 thousand users as a perfect example of how blockchain is not perfect, and that it heavily depends on trust in other human beings.
However, where blockchain does give humanity more power, is in the realm of anonymous transactions. People who have never seen each other before can trust each other if they are using blockchain enabled technologies to do business. This is taking the place of banks for financial services, government officers with regards to identity validation and other such examples.
The common notion that blockchain technology does not require any trust because it is a mathematically provable cryptographic algorithm and one that is completely reliable and without room for error. There is no chance of manipulation within the blockchain itself, a key reason why blockchain technology has become such a driving force in the technology sector today.
In his presentation, he stated that while we do not need to trust a person to update a decentralized ledger, we are trusting a machine. This makes dana censorship possible. These claims were seen by many who attended as completely groundbreaking and will create a new debate among blockchain enthusiasts.
He went on to say that levels of trust are lowered when eliminating possibilities from a single failure point. This is of course made possible by the large source of a single data network, which blockchain uses to make dana penetration from a single source virtually impossible.
The second way blockchain interacts with trust is by expanding it. Lowering reconciliation, automating transactions and making records publicly auditable all serve to expand the trust that the system offers.
Trust in Bitcoin as a commodity has been shaken recently, but in the underlying technology, it is almost infallible. However, Werbach added the way blockchains are completely neutral towards transactions means they face a stumbling block with regards to regulation. A transaction used to hire a murderer or pay for drugs has the same weight on the network as a transaction from a bitcoin mined for the first time.
It is problems such as these that we need to look at and overcome if blockchain is going to fulfill the grand promises touted by companies such as IBM, JPMorgan Chase, and others – including a variety of governments that are quickly looking to take advantage of this exciting technology.
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