The one thing Satoshi didn’t get right
Subsequently, if intermediaries are still needed to store the ledger and process transactions, users must continue to trust middlemen, even in a decentralised money system.
After all, network operators are also potentially fallible human beings. Imagine a decentralised money system run exclusively by the same individuals that run the fiat monetary system? What difference would it make as to whether users must place their trust in the bankers or in the network operators?
Yes, it is true that in a decentralised money system trust in the individual operators of the system is minimised (inversely proportional to the share of operators), but this doesn’t change the fact that a decentralised money system cannot render this trust superfluous, or eliminate it altogether. In fact, in recent years, it has become abundantly clear that untrustworthy operators holding a significant influence over a cryptocurrency has almost without exception led to its demise.
The same applies to Bitcoin. Satoshi himself stated in his white paper release email back in 2008:
As long as honest nodes control the most CPU power on the network, they can generate the longest chain and outpace any attackers.
Therefore, a condition exists: The nodes that control the most CPU power in the network must be trustworthy.
The certainty that one’s money is safe stems from the fact that one has faith in the miners with the most CPU power (as well as the majority of node-operators). They must be considered trustworthy miners (and node operators).
We are not claiming that any traditional banking system is equally or more reliable than a decentralised money system such as Bitcoin. Quite the opposite! Bitcoin possesses a number of characteristics that make it a very trustworthy system. However, as previously identified, it is theoretically impossible to create a money system in which users do not have to trust any individual or group of individuals.
Consequently, blockchain technology does not eliminate trust. It simply transfers it to other parties. A person who favours a blockchain-based money system over a fiat currency is essentially stating, “I trust the miners, node owners, blockchain developers, wallet developers, cryptologists, (and if funds are stored on an exchange also the exchange owners and their employees), as well as my own technical abilities (e.g. not to lose my private keys) more than I trust central bankers, influential politicians, commercial bank owners, directors, fund managers, risk managers, etc.”.
Even if someone is a software developer and cyber security expert who has read the source code of the most used blockchain node implementations and the wallets he uses and determined that there are no bugs or backdoors, he must still trust the miners and node owners.
Thus, we have discovered that even in a decentralised system, we must still rely on intermediaries.
There is no “way to do this without any trust required at all”.
Trust cannot be eliminated.
This is what Satoshi didn’t get right.