Q&A series on basic concepts of Bitcoin (Part 7)

7. Trust and De-trust

1. What trust does Bitcoin remove?

1.1 No need for banks to keep our funds

1.2 De-trust of the bank as the transferring party

1.3 Remove the trust of the bank as a verifier

1.4 The meaning of de-trusting the third party

2. Trust retained by the Bitcoin system

3. Time builds trust

4. Openness and transparency are the sources of credit

5. The machine trust standard created by the Bitcoin system

written in the back

The Bitcoin system is known as a trustless system. What trust is removed by Bitcoin’s system, and what trust is retained?

1. What Trust Does Bitcoin Remove?

1.1 No need for banks to keep our funds

The Bitcoin ledger is distributed and stored on thousands of nodes responsible for keeping the user’s Bitcoin. There is no need to trust any custodian nodes, and the program automatically synchronizes all node ledgers. The number of backup nodes far exceeds any cloud storage project with a centralized structure, there is no risk of funds being embezzled and bank failures, and the credibility of data storage exceeds that of banks. Theoretically, quantum can crack the encryption technology, but if Bitcoin can be broken, all the bank’s encryption will be deciphered. It is a question of spear and shield.

1.2 Remove the trust of the bank as the transferring party

Bitcoin does not have a bank as an intermediary. During the transfer process, the machine automatically completes the transfer and bookkeeping. Banks also have electronic transfers, which are automated during the transfer process. However, the bank controls the user’s account book, and the bank may inquire about large-value transfers and has a lot of additional power over the user’s funds. The Bitcoin system has very little power. Only the bookkeeping privilege, so transactions with low transaction fees may be postponed for bookkeeping.

1.3 Remove the trust of the bank as a verifier

One function of the bank is to verify funds and transactions. The Bitcoin system is confirmed through a program, and subsequent 6 random nodes perform the block verification.

1.4 The meaning of de-trusting the third party

In the blockchain, removing third-party trust means removing financial institutions such as banks. That is, the bank is excluded from the transfer process. Therefore, make the trust required for the transfer process as small as possible. However, the third party’s trust in the Bitcoin system always exists. Although the trusted party does not participate in the transaction, it is still an indispensable part of the system.

2. Trust retained by the Bitcoin system

To trust the level of programmers. Not just on a moral level but also on a cognitive level. Fortunately, Bitcoin’s maintenance team and programmers have implemented Satoshi Nakamoto’s thought: “The 0.1 structure is consistent.”

We must trust computing power and not do evil. When the computing power exceeds 51%, there is no evil.

3. Time builds trust

The trust described in the second article has events as examples. The Bitcoin system has stood the test of time. Time has tested the stability of technology and the level of participants. In addition to issuing coins, from the perspective of the Internet, Bitcoin is a mature system. So has been the trust required for a mature system.

4. Openness and transparency are the sources of credit

It is the core idea of the Bitcoin system. Satoshi Nakamoto only quoted one sentence from Wei Dai in the entire white paper, and he was ranked as the first citation, which shows the importance of this point of view. During the transaction, Satoshi Nakamoto said: “To accomplish this without a trusted party, transactions must be publicly announced.” This idea is also the core idea of Web3. The practice of the Bitcoin system has proved that the best way to gain market trust is to be open and transparent.

5. The machine trust standard created by the Bitcoin system

The Bitcoin system is a currency issuance system, and the issuers are mining machines (mining pools) and core programmers, and they must be trusted not to do evil or can not do evil. So ultimately, we need trust. It’s just that the fewer people you trust, the better; the fewer trust links, the better, and the safer the trust links, the better. The less trust required, the less risk, and the greater the value.

Absolute de-trust does not exist. Even paper money is an intermediary, and people must trust paper money. Modern society cannot function without trust at all. The machine credit created by Satoshi Nakamoto implies trust in third parties and, at the same time, proposes that the way to generate trust in the market is to be open and transparent. We need trust, but we also have to check and balance. Less trust required requires fewer checks and balances. If these checks and balances are not automatic, It is not machine trust. All kinds of chaos in the blockchain lie in the incomprehension of the relationship between automatic trust and checks and balances. Take a look at Bitcoin; it has automatic checks and balances.

The first three items examine the risks of the project. Bitcoin is a core program developed by one person. Two factors require trusting people. The link of trust is the Internet structure and operators.

De-control means that a third party does not control user data, but it still has its community decision-making mechanism as a system. There is still a difference between automatic checks and balances and community decision-making checks and balances. All of the above are degree indicators.

Articles 7 and 8 are mandatory indicators.

Article 9 is about outcome indicators. Time trust is fundamental trust.

Machine trust is the de facto standard made by Satoshi Nakamoto, and Satoshi Nakamoto’s trust standard can be summarized into 9 items:

1. The fewer people trust, the better.

2. The fewer links of trust, the better.

3. The more secure the link of trust, the better.

4. The system has an automatic check and balance mechanism, and the check and balance between computing power and program maintainers.

5. Has a community decision-making mechanism.

6. de-control

7. Master your data by yourself.

8. The ledger is open and transparent and cannot be tampered with.

9. The longer the trust experience, the better; credit takes time to accumulate.

There is another axiom: code is the law. Therefore, modifying the code must be based on the rules, which is the underlying consensus of the machine’s trustworthy standard.

A theorem is derived that the system does not crash.

written in the back

This series provides the conceptual explanations and summaries needed to read chapters 10-13 of the article “Invite Satoshi Nakamoto to welcome the new world” and the previous article Q&A 1-10.

1. Full-text links

This article was published in Bitui Serial.

Chinese link:

https://www.bitpush.news/articles/tag/%E8%AF%B7%E5%87%BA%E4%B8%AD%E6%9C%AC%E8%81%AA

English link: https://en.bitpush.news/?s=Weisha+Zhu

2. Supplementary video explanation (over the wall in China)

This series of articles has been explained on Sun TV, and the articles and TV explanations are complementary.

The TV show is the interpretation of the point of the article. Broadcast schedule: The broadcast schedule is as follows:

Every 1, 3, and 5, Beijing time noon.

Sun TV’s link is as follows:

The whole program is divided into two parts. The first part proves who Satoshi Nakamoto is, and the second part is about the Bitcoin standard. The program will continue, followed by discussions and Q&A, hoping to form a Bitcoin-based theoretical system. Users are welcome to leave messages in the TV comment area, and viewers will be selected to participate in the conversation.

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