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People often say that Bitcoin is trustless, what exactly does it mean?

I know you don't need to trust one of following entities when you transact in Bitcoin, but what don't you need to trust?

  1. third party
  2. recipient
  3. other

You definitely need to trust Bitcoin system, right?

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3 Answers 3

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Bitcoin is untrusted, in that you don't need to trust a third party to use Bitcoin. Bitcoins are signed over directly from you to the recipient. This is binary, either the bitcoins remain under your control, or they have been signed over to the recipient. You can observe the state of your payment by running a full node, i.e. a Bitcoin client that enforces all rules of Bitcoin independently on the data it received from the Bitcoin network.

As you've suspected, you still trust the software that you're running, the community to continue operating Bitcoin under the same rules, and your recipient not to try to swindle you.

Each of those can also be mitigated to some degree, i.e.

  • you can review open-source software yourself (or pay someone to do it for you)
  • you are part of the Bitcoin community that maintains the rules of Bitcoin
  • if the recipient sent you a bill that specified the amount and the recipient's address, you can prove a confirmed payment by means of the blockchain even if the recipient denies receiving it.
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  • The term "trustless" is marketing. The term in cryptography is "untrusted".
    – nopara73
    Dec 1, 2017 at 9:02
  • If the recipient is 'Murch is on strike' and denies that the address of the recipient of the bitcoins belongs to him, how can it be proven by means of the blockchain that 'Murch is on strike' received the bitcoins? It's not possible.
    – Questioner
    Jul 26, 2023 at 21:18
  • The assumption is that the recipient provided an invoice, preferably with a digital signature that provides non-repudation in which they instructed the sender how they’d like to get paid. In that case, showing the bill and the UTXO created by your transaction suffices.
    – Murch
    Jul 26, 2023 at 22:41
  • Who should I show the bill to? To a trusted third party (TTP), probably.
    – Questioner
    Jul 27, 2023 at 21:59
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Since blockchain is a tricky topic and the terminology of Bitcoin and blockchain is full of fallacies, one should be very careful in using the terms.

"Trustless" here means that there is no trust between Bitcoin nodes.

In one sentence, trustless means there is no 'inter-node trust' in the Bitcoin network.

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Bitcoin being "trustless" means you don't need to trust third parties (like banks), recipients, or other participants when making transactions. Instead, the system relies on cryptographic principles and decentralized consensus for secure and direct peer-to-peer transactions. However, you still need to trust the Bitcoin protocol's integrity, honest miners, and the security of your private keys.

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