Blockchain aims to eliminate the trusted third party while still making it possible to do business. I’m curious what trust do we rely on the third party (traditional banking system)? My non-technical friend asked me this question and I realized I don’t seem to have a clear answer.
Currently, I’m looking at this question from the angle of the trusted third-party’s responsibilities in assisting a transaction:
- The third party is trusted not to steal the money from either party of the transaction (although the third party could if it really wants to).
- The third party is trusted to verify the amount of money owned by either party honestly. In other words, if the buyer doesn’t have enough money, the third party would not hide this fact.
- The third party is trusted to modify the amount of money owned by either party honestly. In other words, if the buyer pays $10 to the seller, the third party would not add more than $10 to the seller, or subtract more than $10 from the buyers.
- The third party is trusted to report the double-spending issue if one is found. In other words, the third party would not secretly work with the buyer to deceive the seller for goods/services.
To sum up, I think the third party is supposed to perform two fundamental functions honestly:
- Track the amount of money owned by each party.
- Report, not hide, double-spending situations.
Is there any other major aspect that requires the trust on the third party?
Article First Published here