As established by Satoshi Nakamoto’s Bitcoin (BTC) whitepaper, the core of cryptocurrency is a peer-to-peer electronic cash system that eliminates the need for intermediaries like banks. This spirited independence and scoffing at the hand-holding of traditional banking systems is pervasive across the cryptosphere.
Yet, when mass adoption is the goal, some hand-holding becomes necessary in order to bring everyone along on the journey toward truly decentralized finance. We cannot expect our grandparents — who have difficulty sending an email — to sort out how to manage private keys, seed phrases and digital wallets and send your birthday gift in Bitcoin without some assistance. Indeed, this transition to decentralized finance is already well beyond sending birthday money and has evolved to include yield farming, liquidity mining and nonfungible token auctions. As such, trusted intermediaries have never been more essential to fulfilling the mainstream aspirations of DeFi and crypto.
Robots don’t need trust, but humans do
Trust is paramount to daily life in any civilization. We trust the opinion of doctors. We trust the taxi driver will take us where we need to go. We trust the food served to us at restaurants is safe to eat. We trust that cars will stop when the walk signal lights at a crosswalk.
In the trustless world of cryptocurrencies, we still make decisions about who and what we trust. Most of us are not developers or engineers capable of analyzing the code of every DeFi protocol and every token before we participate. Instead, we gather information and assess what action to take based on what we do understand. Key questions in this decision-making process are: Do we trust the organization and the people behind the protocol? Do we trust that they are acting in good faith and the protocol does what it says it does?
Studies have found that where we put our trust is evolving alongside the development of new technologies. Despite the novelty of algorithms deploying machine learning and artificial intelligence, people are increasingly putting their trust in algorithms over fellow human beings. A study published in Science Daily found that when subjects were presented with a crowd photograph and asked who would be better at arriving at the correct number of individuals featured in the picture, more said AI than said humans. At the same time, a different study found that a person’s trust in technology is highly dependent on their exposure to it, with degrees in technology or engineering and familiarity with online algorithms leading to higher levels of trust in AI.
The results of both studies surely apply to the world of cryptocurrency as well. Growing trust in technology has made the adoption of cryptocurrencies as widespread as it is. Still, it’s important to recognize that this adoption is occurring at varying rates across different demographics. Those with the most exposure to newer technologies — engineers and developers — are the earliest to adopt; those with the least exposure and access to resources trail behind. Therefore, it is incumbent upon those of us immersed in the cryptosphere to prioritize supporting those with less exposure. We do not want to end up with a “technopoly” wherein those with greater technical knowledge are the most privileged and those with the least are denied participation. That hypothetical dystopia would be contrary to the original democratizing promise of Bitcoin.
Crypto’s usability challenge
We must acknowledge that cryptocurrency presents unique usability challenges. Even among people who have access to the internet — currently measured at around 4.66 billion — use is often limited to social media, search and email. These web users are comfortable with email and password logins. Adding management of private keys — a string of…
Read More: cointelegraph.com