Back in 2015 when I first heard about Blockchain, I was confused. I’m a Computer Scientist by trade, Blockchain for me sounded like a really awful database. It stores data and serves it publicly to the world any database can do that so I thought. Slow, tedious to set up, expensive to run, bad interfaces. It felt like the last 40 years of Database engineering had not happened. We do have distributed fault-tolerant database that is run on worldwide networks, go to any cloud computing service and you have this set up in about 5 Minutes.
So what does the Blockchain have that no classical Database can ever provide? Short answer: Trustlessness. But what does this even mean?
I Trust You
To answer this question we must investigate trust. Trust has this positive connotation in our society. “I trust you” sounds great, positive and we get a good feeling hearing it. But is trust something inherently good? it makes me as the truster vulnerable to the trustee. In our daily lives, we often have no choice but to trust. A simple example is my Bank, every day I pay with my debit card or credit card. But I must trust the bank that they really execute these payments and that all the money I put into the bank I will get back when I want to spend it. I have no choice but to trust my bank and all the employees of the bank that handles my money. Why do I do so? Because there is an elaborate system in place that makes sure that my trust is not breached. There are thousands of controls within the Bank controlling that anyone that manages money can not cheat. Even the banks themselves are controlled by control instances that they do not cheat. This what I call a Trust System. There are many of these in place in our lives but we do not notice them because we are so used to having them.
A Trustless System
This is where the blockchain offers value, it has the potential to remove the trust from the system. It builds the trustlessness right into the code. No other system can do that. The best example is financial transactions, the current killer Application of the blockchain. Why you ask? Because it removes all the need for trust when someone sends me money on the blockchain I can be sure that I receive the money. And no third party can hinder this transaction or take my money away from me. Not my bank, the Swiss government, Donald Trump nor the Chinese party leader. I do not need to trust anyone anymore with my assets when they are transacted and stored in a well-functioning blockchain.
Trustlessnes is the true power of the blockchain. This will at least impact the financial service industry but It has the potential to replace all trust systems that we use every day.
This article was written by Dr. Andreas Hauri based on the Blank Collar Meetup on the 29th of May, 2018.