The technology that sustains bitcoin and other cryptocurrencies, blockchain, depends upon making a transaction “without relying on trust”.
Satoshi Nakamoto created Bitcoin and its accounting ledger, blockchain, for people to be able to trade units of value without needing to trust centralised authorities such as banks.
If this is true, it means that it would lead transactions which were not verified by the government, banks or institutions. This could mean we would be able to transfer ownership of a house without a lawyer and financial services would not require a bank verifying transactions.
It is not clear whether a blockchain-powered currency like Bitcoin, can go mainstream without the backing of a trusted authority as there are no examples of money, including gold, that have been successful without an authority’s support.
When there is a bitcoin transfer, it is verified by “miners” which are really powerful computers. It is then encrypted and a “block” is added to the ledger.
The blockchain technology does not create or eliminate trust and so, we have to ask ourselves, can we trust the technology itself?