Chapter 12 - Trust

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Chapter 12

Trust

Trust is difficult for many people.  Many of us have been figuratively burned in so many ways it is sometimes difficult to put faith in the unknown.  Nobody can predict the future, and trust is part of that unknown with lack of predictability in the future.  When we infuse our past failings or events that involved trusting whether that be people, systems, machinery or other aspects one must put a certain level of trust in accepting what is before you in order to move forward.  This does not mean one should trust  everything with unlimited bounds, nor should it mean having no trust in things or people that have potential to create great reward with little risk.  

There are many examples that could be used to describe the degree of trust being proportional to the potential risk and reward.  The author brings this into play here because as we age, we learn from lessons of the past and the most important lesson of all in this author’s opinion is to keep an open mind and consider the level of trust relative to risk and reward.  At times, trust will be zero or nearly zero, but it shouldn’t be done in hast and without consideration for what the risks and rewards are.  

In earlier days, it was a measure of arrogance that prevented me from better considering the relationship between trust, risk and reward.  I say this due to its relevance in the context of Bitcoin and the person that is Satoshi Nakamoto.  When someone presents an idea that is far reaching and seemingly implausible, e.g. Elon Musk’s goal of human colonization on another planet, one shouldn’t be so hastened to disregard that vision. Much has been accomplished by visionaries across humanity and time.  In hindsight, this author really should have taken more care to listen, to consider, and trust to a degree that is proportional to the risks and rewards at the time.  

As the forementioned relates to the appeal of Bitcoin most, is its integrity and security.  By way of the proof of work protocols, the bitcoin blockchain establishes a nearly unbreakable storing mechanism.  I say nearly, because even Satoshi Nakamoto himself in the White Paper acknowledges nothing is absolute, but it is certainly improbable.  Now that improbability was in the early days in the context of self-custody and maintaining one’s own secure wallets and private keys.  With the advent of exchanges and other holders of bitcoin, there are additional means of potential intrusion and security loss which in turn requires additional trust. 

There are varying forms of securing cryptocurrency from keeping it on the network exposed to other computers to keeping it offline and off the internet in what’s called cold storage much the same as thumb drives or floppy disks back in the day.  And even yet, there are methods of paper security that allow for keeping both the wallet where the currency is held and the written code or key along with it that only the holder would have custody.  There have even been embedding bitcoin into gold coins as a means of storage.   At this point in time, there is no shortage of variations to not just securing bitcoin but many other cryptocurrencies as well.

As one becomes more educated with the integrity of Bitcoin and the different means to secure it, the degree of trust increases as risks diminish proportionally.  The same could be said inversely with the trust decreasing as risks appear to advance.  Not having the informed basis for this trust would inevitably result in very low trust for most people and likely in the end result in no action or involvement in Bitcoin.  

Trust should always be in the context of risk reward.  Consider the risk or fall out of trust relative to the reward.  This applies to every decision and every action, not just in the context of bitcoin or cryptocurrencies.  Something with very little risk and tremendously high reward, one can afford a great deal of trust and move forward easily.  Conversely, something with a high degree of risk and little upside or reward should have minimal, if any trust.  There will be a near infinite sliding scale of degree in trust based on the extent of risk and reward.

They say trust is earned.  Well, this would imply zero trust until earned with having no consideration for the risk or reward.  Or having limitless trust with no consideration as to the risks or rewards.  Everything, every action, every decision has a risk and a reward, either quantitative or qualitative.  My regret, as it pertains to bitcoin, is not better understanding this relationship between trust, risk and reward earlier in time.  Apologies if much of this is repetitive or obvious but it is an extremely important life lesson, I believe everyone should consider.  

In this end, my regret as it pertains to the person that would become Satoshi Nakamoto, is not better assessing this trust, risk and reward and the potential of a long-standing friend.