Why we need trust more than ever

Fig 1: From barter to cryptocurrency
You have probably heard of “Dunbar’s Number". The theory of Dunbar’s Number points out that 150 is the number of individuals with whom any one person can maintain stable relationships.

Fig 2: Theory of Dunbar's Number
In ancient times, people lived in small groups. As a result, each person was fully aware of the other people in the group and everyone trusted each other.
✔Note: Do you know what is the most consumed service in the world after the formation of civilization? Trust.
As human communities grew, the number of people who directly knew each other decreased. Person-to-person trust lost its credibility in this new social structure and people needed a solution to the problem of trust. Third party trusted by both parties was able to solve this issue. One of the most important parts that really needed the Trusted Third Party (TTP) was financial sector.

Fig 3: Traditional money transfer
Barter gradually was replaced by the use of common goods, metal money (coin), modern coinage, gold-standard based paper money and ultimately Fiat money. Although this was a good solution, it posed a big problem for us, especially after the advent of the Internet: centralization.
✔Note: Let me elaborate on this term before continuing the discussion. My focus here is on computer systems. Centralization is divided by two parts: architectural and political. Architectural centralization means that only one computer system will provide service to customers. In political centralization only one entity has control over delivering the service to customers. According to this definition, if an organization or technology does not satisfy both of the above conditions then it will be decentralized. For example, Google is architecturally decentralized because it clearly delivers its services through more than one computer system. However, we do not consider it politically decentralized, since only one entity oversees existing data and services. As a result, Google falls into the category of centralized services. Of course this is a spectrum. The more diverse the processing systems and the more controlling entities, the more decentralized the structure.
Although we wanted the Internet to decentralize things, the result was something else. Eventually we came across companies that owned a large amount of our data. The more data you have, the more power you will have. In a nutshell this has some drawbacks as follows: single point of failure, probability of collusion, and unjustified cost. Above all, there was a problem that sounded the alarm: monopoly of trust. This led some scientists to look for decentralized structures that removed the monopoly of trust existing in centralized structures. The goal was that the majority of nodes in the network reach consensus on the next correct states and then all nodes maintain this states. After a while, some successful proposals such as pBFT (Practical Byzantine Fault Tolerance) were proposed that allowed the implementation of the trust element. However, there was one important premise in all of them: identities must be clear. in the aftermath of the 2008 financial crisis, a person or group named Satoshi Nakamoto published an article in the Cypherpunks mailing list explaining a data structure named Blockchain and a cryptocurrency called Bitcoin. Eventually, Bitcoin network went live on 3rd of January in 2009 and Distributed Ledger Technology (DLT) came onto the scene. Although almost all the features contained in Satoshi’s proposal such as PoW (Proof of Work) consensus mechanism and cryptography algorithms already existed, what happened with the emergence of Bitcoin was the birth of the trust layer in a network of distributed identity-unknown nodes. In fact, It was a revolution in trust and non-intermediary paradise.

Fig 4: How a blockchain works
Since then a lot of researches have been done and are being done on DLT some of which are as follows:
1. Data structures other than Blockchain such as Tangle and Hashgraph.
2. Consensus mechanisms other than PoW such as PoSv3 (Proof of Stake v3), Masternodes and PoA (Proof of Audit).
3. Quantum-proof encryption
4. Scalability
Why is bitcoin money?
Economists define money as a store of value, a medium of exchange and a unit of account. Any medium that has these six features is money:
1. Durability
Imagine a time when people used the common goods like cows to trade. In this system, if your cow died, you would lose your capital. on the contrary, Bitcoin’s Miners and Full nodes are responsible for transaction block verification, block creation and maintenance of an immutable Blockchain.
2. Divisibility
In the previous example, could you cut the ear of your cow to pay for a product? On the contrary, every Bitcoin is divided down into 100 million bits, each bit is called a "satoshi".
3. Portability
You can move your funds in or out your Bitcoin wallet with paying a small transaction fee.
4. Uniformity (fungibility)
Just as every dollar is one dollar, every Bitcoin is one Bitcoin.
✔Note: Of course, from a specialized perspective, it is not true compared with privacy-focused cryptocurrencies like Monero, DAPS and Zcash.
5. Limited supply
There are only 21 million Bitcoins that can be mined in total.
6. Acceptability
This does not need to be discussed, because if i wanted to give you 1 Bitcoin right now, you would definitely accept it. Intrinsic value of money is not measurable, but like everything else, the value of money depends on supply and demand.
