Lesson 16 - Reflections on "Don't Trust, Verify"

Lesson 16 Reflections on "Don't Trust, Verify" "Now for the evidence," said the King, "and then the sentence."   Bitcoin aims to replace, or at least provide an alternative to, conventional currency. Conventional currency is bound to a centralized authority, no matter if we are talking about legal tender like the US dollar or modern monopoly money like Fortnite’s V-Bucks. In both examples, you are bound to trust the central authority to issue, manage and circulate your money. Bitcoin unties this bound, and the main issue Bitcoin solves is the issue of trust. “The root problem with conventional currency is all the trust that’s required to make it work. […] What is needed is an electronic payment system based on cryptographic proof instead of trust”Satoshi Bitcoin solves the problem of trust by being completely decentralized, with no central server or trusted parties. Not even trusted third parties, but trusted parties, period. When there is no central authority, there simply is no-one to trust. Complete decentralization is the innovation. It is the root of Bitcoin’s resilience, the reason why it is still alive. Decentralization is also why we have mining, nodes, hardware wallets, and yes, the blockchain. The only thing you have to “trust” is that our understanding of mathematics and physics isn’t totally off and that the majority of miners act honestly (which they are incentivized to do). While the regular world operates under the assumption of “trust, but verify,” Bitcoin operates under the assumption of “don’t trust, verify.” Satoshi made the importance of removing trust very clear in both the introduction as well as the conclusion of the Bitcoin whitepaper. “Conclusion: We have proposed a system for electronic transactions without relying on trust.”Satoshi Nakamoto Note that “without relying on trust” is used in a very specific context here. We are talking about trusted third parties, i.e. other entities which you trust to produce, hold, and process your money. It is assumed, for example, that you can trust your computer. As Ken Thompson showed in his Turing Award lecture, trust is an extremely tricky thing in the computational world. When running a program, you have to trust all kinds of software (and hardware) which, in theory, could alter the program you are trying to run in a malicious way. As Thompson summarized in his