When we talk about systems that are not trusted, we imply some kind of application that does not require users to trust it. The idea is to function accurately and fairly every time without cheating on users. They are designed so that users do not need to trust a single person or entity.
Untrusted systems are an alternative to the centralized applications used today and are completely dependent on trust. For example, take a look at the Mobile Banking Application. No doubt, you believe that no one will steal your life savings, as you believe the bank itself will keep them safe.
Web3 systems do not have this kind of centralized authority. Therefore, designs must lose trust. But so far, they have not really been trusted.
I can’t trust blockchain yet
In systems that do not trust, code is assumed to be legal. Smart contracts are designed to automatically execute transactions when specified conditions are met. They use pre-defined rules to prevent operations, and in most cases they work well. But that’s not always the case. As the code itself is written by humans, it remains susceptible to bugs and vulnerabilities, and there are many millions of dollars of hacks throughout the history of cryptography.
Oracle issues are another challenge for untrusted systems. Oracles brings real-world data such as weather conditions, stock prices, sports outcomes, on-chain, and more, but this can only be done with human intervention. Oracles are created by humans and DAPP users must trust these Oracles. Therefore, the system is installed to verify the data. If data is unconfirmed, the “untrusted” nature of the blockchain that uses them is compromised. Therefore, networks may be decentralized, but they rely on the integrity of other systems.
Trust can also be revealed in other ways. A particular blockchain project or DAPPS may gain instant credibility based on the reputation of the people involved. For example, a project involving Vitalik Buterin, perhaps the most well-known blockchain character, will gain instant credibility, and its associations can affect the perspective of others. Many users will assume that it is definitely not a scam simply because of his involvement.
Additionally, certain types of digital assets require trust. One of the most obvious of these is “wrapped Bitcoin” or WBTC. This is a cryptocurrency that lives on the Ethereum blockchain. It is fixed at the original Bitcoin price, and this is done by collateralizing each WBTC minted with one BTC. However, BTC itself is held by a privately owned company called Bitgo. This acts as the manager of these assets. This means that anyone who uses WBTC must trust it.
The reliance on human surveillance of blockchains means that despite all the claims to the contrary, it is not entirely trusted and exposed to risks such as the reintroduction of centralization. For example, a group of developers responsible for updating smart contract codes, or popular Oracle operators can affect your network in a negative way, act maliciously, and put your users at risk.
The need for trust also raises questions about blockchain transparency claims. While distributed ledger transactions are public and may be verifiable, the motivations and actions of human actors involved in coding, manipulating oracles, or obtaining custody funds are undoubtedly not.
Layer-3 enhances digital trust
The somewhat undisputed nature of blockchain-based systems is not recognized. This explains why layer 3 networks like Orbs are trying to fix it by building more robust mechanisms that reduce the need for human surveillance.
Orbs also works to build decentralized “execution layers” above Layer 1 and Layer 2 blockchains to improve capabilities and performance, and to increase reliability as part of those efforts. This is based on an independent network of decentralized “parents” encouraged to maintain their integrity, and there is a threat of serious financial penalties if they misconduct. These nodes are responsible for performing complex calculations, allowing them to interact with smart contracts hosted on multiple blockchains, allowing the ORB to act as a secure, verifiable layer of the obchain logic. Using Orbs’ infrastructure, DAPPS can implement advanced features that are not possible when operating directly on an L1 or L2 network.
Importantly, Orbs’ infrastructure helps minimize human reliance on surveillance. Its permitted verifiable execution environment automates and protects sophisticated processes that require the use of trustworthy intermediaries, enhancing the untrusted nature of blockchain and DAPP.
Orbs also supports reputation systems running on L3 networks, allowing blockchain users to create decentralized identities that prove their names, ages and qualifications without revealing them to anyone. These DIDs can be used on any blockchain integrated with orbs, and become interoperable across Web3, increasing digital trust.
Remove intermediaries and custodians
Orbs’ efforts to build trust in the infrastructure layer are complemented by various initiatives in the blockchain world that seek to crush the need for intermediaries and human surveillance.
Humanity Protocol, for example, has created a humanity consensus mechanism designed to prove that blockchain users are real people, as opposed to bots or just someone’s second (or third or fourth) accounts. This is an essential tool for blockchain governance, especially in DAOS, which seeks to increase fairness with a more sophisticated voting system that avoids token weighting. It allows untrustworthy verification for users that moves trust from human surveillance to encrypted proofs, and creates multiple wallets to ensure that individuals cannot gain more influence over the protocol.
Meanwhile, a project called Zeus is targeting managers of ZBTC, a WBTC alternative who lives on the Solana blockchain. Rather than sending funds to custodians to assets, Zeus utilizes an unauthorized architecture in which BTC is securely held by a network of validators known as the “guardians.” Funds are bridged from Bitcoin to Solana using the Zeus Program Library. This creates one ZBTC token for all the BTC that is depositing.
When a user sends BTC to the Zeus program library, it is stored securely in a smart contract run by the Guardian network and sent to a wallet where an equal amount of ZBTC tokens are released. The Guardians can’t work together to control those smart contracts and unlock them without all other approvals. This means that BTC can only be unlocked after the ZBTC built in that location is burned back into the Zeus program library.
Trust me, it’s getting better
Projects such as Orbs, Humanity Protocol, and Zeus strive to create a more reliable, complete digital ecosystem that reduces the need for human intervention. This is important. Because as long as humans need to keep things up and get things right, blockchain-based systems always have a factor of trust. By reducing trust, we can increase decentralization, which means greater equity and transparency.
While it may not be possible to completely eliminate the need for trust, the continuous innovation in these projects will help minimize human dependence to the extent that a single entity does not have enough influence to operate the system to its advantage.
