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Definition: trustless
Not trusted. The term trustless often refers to Bitcoin, Ethereum and other blockchain-based networks because no individual party that participates in blockchain processing needs to be trusted.
Doesn't Trustless Mean the Opposite?
For crypto, the meaning is not really clear. Trustless means no single party needs to be trusted because a majority of active parties agree by reaching consensus. The blockchain protocol is designed to maintain the integrity of the system, which means that the blockchain itself is trusted. Careful thinking about naming things in the world of technology is not always a priority (see naming fiascos). See consensus mechanism, 51% consensus, blockchain, permissionless and crypto glossary.
Can We Trust a Centralized Exchange?
Doesn't Trustless Mean the Opposite?
For crypto, the meaning is not really clear. Trustless means no single party needs to be trusted because a majority of active parties agree by reaching consensus. The blockchain protocol is designed to maintain the integrity of the system, which means that the blockchain itself is trusted. Careful thinking about naming things in the world of technology is not always a priority (see naming fiascos). See consensus mechanism, 51% consensus, blockchain, permissionless and crypto glossary.
We may trust the blockchain, but can we trust an exchange that holds our crypto? In 2022, Netflix released this documentary about the founder of a Canadian exchange who supposedly died in 2019 and $200 million in bitcoins disappeared (see Quadriga). (Image courtesy of Netflix.)