The power of blockchain is often characterized as one that enables two parties to engage in "trustless" transactions. Lately, I've been thinking a lot about what exactly that means. I mean, upon further consideration, the word "trustless" seems like a bad word.

Let's check the tape then. What's the actual definition of "trustless"? I went to the dictionary and checked it out.

According to Dictionary.com, the word "trustless" means "untrustworthy, deceitful; distrusting, wary, suspicious."

Uh, that's supposed to make me feel better about blockchain?

We, as an industry, need to rethink this.

I started thinking about this obvious conundrum a couple weeks ago when I saw notorious uber Bitcoin maximalist Bobby Lee give a highly entertaining speech in Shanghai. I then came across this strange feeling that something is just amiss about the way we talk about this topic in general once again while researching the 4th episode in our Block Runners podcast series about "Proof of Work" (coming out soon!).

We need to wrap our heads around this concept of "trustlessness" because it lays at the very foundation of why blockchain technology is revolutionary. As The Economist put it in an article on the 7th anniversary of Satoshi Nakomoto's whitepaper in 2015, it is this aspect which "makes possible a currency without a central bank."

Thankfully, I'm not the first person to call out the misnomer that using the word "trustless" in reference to a blockchain is. For that, I look to the wonderful Preethi Kasireddy. Her February 5 Medium article on the subject, "ELI5: What do we mean by 'blockchains are trustless'?" is a great resource.

A truly "trustless" transaction can only occur when the two parties engaging in the transaction are in physical proximity to one another. All other non-present transactions require some form of intermediary to replace the trust that can only be earned by actually looking someone in the eye and shaking their hand while you are engaging in an exchange of value.

However, this setup is clearly limited and in no way facilitates the scaling of a global payment network. So how exactly does blockchain help to revolutionize the transfer of value instantaneously and globally? Is this conceit a myth? Not really. We're just using the wrong words to talk about what is going on here.

To quote Ms. Kasireddy:

In a “centralized” system, we trust a single third party (e.g. Chase Bank) to act as the intermediary who guarantees those two properties [sender authenticity & currency validity] ; in a “decentralized” system, our trust is placed elsewhere, namely in public-key cryptography and a “consensus mechanism” that allows us to determine the truth.

Essentially, instead of trusting in a centralized party, when we conduct a transaction on a public blockchain, we are placing our trust in an entire ecosystem of distributed trust.

Or as Kasireddy puts it, using a public blockchain means that we are "trusting everyone in aggregate." All of the developers, miners, and users of that blockchain that have ever existed up to that point in the distributed ledger.

It's kind of like jumping into a swimming pool full of warm water, whereas dealing with a bank is like jumping into a potentially ice cold bath full of hammerhead and Great White sharks.

You tell me which one you'd prefer.