Trust is still a must in the trustless world of cryptocurrency


As the number of cryptocurrencies explodes, it’s no surprise that many people are now asking: is trust still a must in the trustless world of cryptocurrency? Some digital currency advocates insist that it is. They say that just like the world of fiat, there are also a lot of thieves who will try to steal your funds and leave you empty handed. Therefore the only way to regain your lost funds is through force. Others remain unconvinced and think that trustless systems are just as difficult to use as trustful systems.

In our current world of trust, people still feel the need to sign contracts, take out loans, and deposit their money in banks. However, fiat money is not the only option out there. You can also store your money in crypto-currencies like bitcoin, ethereum, ripple, etc. However, there are some drawbacks such as the high volatility of the prices. This means that if you store your crypto-coins in an exchange, then you will not be able to be sure that your coins are really yours, or that you will not lose them.

Trust is still a must in the trustless world of cryptocurrency

The cryptocurrency is based on the peer-to-peer electronic money system created by Satoshi Nakamoto in his book Bitcoin (BTC), which eliminates the need for intermediaries such as banks. This strong independence and apparent manual control of traditional banking systems is widespread in the cryptosphere.

Nevertheless, if mass adoption is the goal, everyone will need to slow down a bit on the way to a truly decentralized financial world. We can’t expect our grandparents with email problems to figure out how to manage private keys, commencement sentences, digital wallets, and send a bitcoin birthday gift without help. In fact, this movement toward decentralized finance has already gone far beyond sending money for birthdays and has evolved into yield farming, cash mining, and game-free token auctions. Trusted intermediaries are therefore more important than ever to make the desire of DeFi and cryptocurrencies to go mainstream a reality.

Related: Liquid mining is booming – will it stay or fail?

Robots don’t need trust, but humans do.

Trust is the alpha and omega of everyday life in any civilization. We trust the opinion of doctors. We trust the taxi driver to take us where we need to go. We believe that the food served to us in restaurants is safe for our health. We think cars stop when the pedestrian signal is on at the crosswalk.

In the cautious world of cryptocurrencies, we are still deciding who and what to believe. Most of us are not developers or engineers capable of analyzing the code of each protocol and DeFi token before participating. Instead, we gather information and assess what action to take based on what we understand. The key points of the decision-making process are: Do we trust the organization and the people behind the protocol? Can we believe that they are acting in good faith and that the protocol is doing what it claims to do?

Research has shown that as new technologies are developed, the place we assign to trust changes. Despite the novelty of algorithms using machine learning and artificial intelligence, people increasingly trust algorithms more than people. The study, published in Science Daily, found that when subjects were shown a photo of a crowd and asked who was better at determining the exact number of people in the photo, more of them answered AI than humans. On the other hand, another study found that a person’s trust in technology depends heavily on their familiarity with it, with a degree in technology or engineering and familiarity with online algorithms leading to a higher level of trust in AI.

Related: Mass adoption of blockchain technology is possible, and education is key

The findings of these two studies certainly apply to the world of cryptocurrencies. Growing confidence in the technology has made the adoption of cryptocurrencies a widespread phenomenon. Nevertheless, it is important to recognise that this uptake is not occurring at the same rate in all demographic groups. Those who are most familiar with the new technologies – engineers and developers – apply them first; those who are less familiar with them and have less access to resources are left behind. Therefore, those of us who are immersed in the cryptosphere have a responsibility to prioritize support for those who are less familiar with cryptocurrencies. We do not want to end up with a technopole where those with the most technical knowledge are the most privileged and those with less knowledge are not allowed to participate. Such a hypothetical dystopia would run counter to bitcoin’s original democratic promise.

Problem with the usability of crypto-currencies

We must acknowledge that cryptocurrencies present unique usability problems. Even among those who have access to the Internet – currently some 4.66 billion people – usage is often limited to social media, search and email. These users are familiar with email and login passwords. The addition of private key management – a jumble of numbers and letters difficult for the human eye to interpret – requires overcoming this ignorance to which web users are accustomed.

Related: Decentralised funding may be the future, but education is still not enough

The core value of Your Keys, Your Coins is revolutionizing our financial systems by giving users control over their assets instead of relying on banks and other centralized third parties. However, this empowerment also comes with a burden that many newcomers are not immediately prepared for. We’ve all heard the horror stories of users losing their private keys, which resulted in them being unable to access cryptocurrencies potentially worth millions of dollars.

I believe that we should not constantly throw newcomers into the water of cryptocurrencies and ask them to swim. Once people are comfortable with managing their private keys, the wheels can come off and they can take on the burden (and benefits) of managing your keys, your coins.

New users should receive fullsupport.

The percentage of WiFi users is still quite low. According to ConsenSys’ Q1 DeFi report, the total number is estimated to be around 1.75 million. Compared to the 4.66 billion internet users, this gap shows the huge growth potential of the crypto economy. I would argue that exchanges and platforms that prioritize education, user experience, and customer support will take the lead this year and in 2022 and capture a significant portion of this untapped market.

Related: To accelerate the adoption of cryptocurrencies, we must first improve the user experience.

Women, in particular, make up a growing user population, and cryptocurrency platforms don’t devote enough resources to serving them. A survey of CoinGecko 2020 users found that only 9% of women had heard of DeFi. This inequality between male and female users is unacceptable.

Cryptocurrencies will only unlock their true potential and enable a global user base to control their own value when we see acceptance of cryptocurrencies across all demographics, including gender, age, education, geography and technical knowledge. Therefore, no matter how hard decentralized technology tries to eliminate the middleman, the human element remains crucial to the widespread adoption of cryptocurrencies.

This article contains no investment advice or recommendations. Any investment or business transaction involves risk, and readers should do their own research before making a decision.

The views, thoughts and opinions expressed herein are those of the author and do not necessarily reflect or represent those of Cointelegraph.

Lawrence Newman is the co-founder of Coinmama, a serial entrepreneur and a veteran in the bitcoin space. After facing the challenges of buying bitcoins, Lawrence decided to create a hassle-free, safe and fun buying experience for everyone, and Coinmama was born. In addition to her position on the Board of Directors, Laurence leads Coinmama’s marketing and strategic partnerships.

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Emilia James
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