Blockchain: Trust Is Not A Binary Option
Trust doesn’t have to be an all-or-nothing proposition when it comes to Blockchain
Blockchain’s primary value proposition is decentralization, the idea that the “truth” can be validated without 3rd party intervention in a trustless environment. As technology has proliferated over the last several years, we have seen the infrastructure incorporate many different types of protocols:
- Public – Fully open blockchains with no barrier to participating (eg, Bitcoin, Ethereum)
- Permission – Private blockchains where a central entity controls access (eg, Orderers in Hyperledger Fabric)
- Federated – A consortium of entities controlling the blockchain (R3 comes to mind)
Each of these options has a different take on “trust.” There are some in the crypto space who feel the only groundbreaking solutions are the public, or “permissionless,” solutions. Their argument is that a protocol is only decentralized when it is fully public, and only then can it reach the full potential of the blockchain.
It’s a fair point, to be sure. How can you be decentralized if one or more entities are entrusted control access to the blockchain? However, it occurs to me that this is a very binary view of trust – in reality, trust is more nuanced and multi-layered, like a set of qubits more than a simple 0/1 representation.
Every single day we maintain simultaneous levels of trust at the same time. I trust my wife implicitly (I hope that is wise), while I have much less trust in the Lakers’ ability to win a title without LeBron. I have varying degrees of trust in my employees based on past performance, while I have no trust in the cars speeding along my neighborhood street when I walk the kids to school.
Our entire day is defined by a cascading array of trust, depending on our situation. We understand and accept this because trust is a tool we use to maximize our benefit in specific situations. I’m not going into a conversation with my wife about whether to have a 4th child (spoiler alert – not happening) from a lack of trust, because the conversation would be utterly pointless. Conversely, I’m not going into a startup pitch from a place of trust, because it would eliminate the healthy skepticism I’ll need to evaluate the opportunity.
Why wouldn’t the same concept apply to blockchain? Does every system need to be fully permissionless to add value? The security and decentralized nature of Bitcoin works great for payments between people who don’t know each other, but in certain environments, organizations can still benefit from blockchain with a degree of centralization, provided there is a healthy level of trust. For a tight supply chain of organizations with the right incentives to work together, a federated or permission solution would do just fine.
Ripple uses roles to establish specific participants to act as transaction validators
I’ve heard the argument that blockchain technology isn’t needed in situations where a centralized approach is acceptable – a central database would do just fine. Sure it may be fine, but why not use blockchain when the technology provides other value propositions out of the box – namely, transparency and immutability?
My point is this: because trust is a multi-layered concept in our daily lives, and blockchain can handle trust in many different ways, we should embrace its implementation to support more than just the no-trust situations. Let’s not limit blockchain’s potential while we still shaping this exciting new technology.
