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How 'Trustless' Is Bitcoin, Really?


The computer scientist Jaron Lanier, an early reader of the paper, called the investigation “important and significant” in its ambitions and social implications.

Credit: Timo Lenzen

Alyssa Blackburn, a data scientist at Rice University and Baylor College of Medicine in Houston, has spent several years performing digital detective work with her trusty lab assistant, Hail Mary, a shiny black computer with orange trim. She has been collecting and analyzing leaks from the Bitcoin blockchain, the immutable public ledger that has recorded all transactions since the cryptocurrency's launch in January 2009.

Bitcoin represents a techno-utopian dream. Satoshi Nakamoto, its pseudonymous inventor, proposed that the world run not on centralized financial institutions but on an egalitarian, math-based electronic money system distributed through a computer network. And the system would be "trustless" — that is, it would not rely on a trusted party, such as a bank or government, to arbitrate transactions. Rather, as Satoshi Nakamoto wrote in a 2008 white paper, the system would be anchored in "cryptographic proof instead of trust." Or, as T-shirts proclaim: "In Code We Trust."

The practicalities have proved complicated. Price turbulence is enough to induce the Bitcoin bends, and the system is environmentally destructive, since the computational network uses exorbitant amounts of electricity.

Ms. Blackburn said her project was agnostic to Bitcoin's pros and cons. Her goal was to pierce the scrim of anonymity, track the transaction flow from Day 1 and study how the world's largest cryptoeconomy emerged.

From The New York Times
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