Trust to Trustless
Humanity has undergone 3 major paradigm shifts in transacting. Bartering was the first paradigm shift, allowing humans to trade one good for a different good. The second made trade even easier, allowing all goods to be assigned a value using a standard measurement, i.e. money. The third shift allowed trade to occur without the two parties ever having to meet, by trusting a middleman. This allowed for cross continental trade and allows us today to order millions of products on Amazon. With the arrival of blockchain technologies like Bitcoin and Ethereum, we are currently undergoing the 4th major paradigm shift. Where Amazon and Visa are single points of failure, blockchain offers what I call a level 1 trustless system. There is no single point of failure that we must trust, the nodes of the network ensure consensus, without even having to trust each other. Level 1 trustless systems can still fail. Though difficult, it is possible for malicious actors to compromise the network. There are also humans in control of these projects that act as another point of weakness. The next paradigm shift will be to a level 2 trustless system, which realistically cannot be compromised by a malicious actor. A level 2 trustless system does still rely on humans to steer the direction of the project. A level 3 trustless system is what I consider to be fully trustless. That is, malicious actors cannot compromise the network and there are no humans in control of the direction of the project.