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Trust is a two-way sword for crypto. Trustlessness is a foundational principle in this domain. But crypto-powered systems must also be trustworthy enough for users and investors to participate.
Can the two co-exist? Yes, indeed, since trustlessness is a technical feature while trustworthiness is social.
A system is trustless if it can function efficiently without requiring users to trust each other. However, it’s trustworthy if users can rely on it to function transparently, securely and consistently.
Given the series of systemic failures and malpractices witnessed in 2022from Terra to FTX crypto innovators must commit to trustworthiness in 2023. That’s the only sustainable way forward for the industry to regain investor confidence and ensure adequate consumer protection.
It’s easier said than done, but thankfully, the tools to ensure systemic robustness and consistent performance are already available. The need of the hour is to use them with integrity and a forward-looking approach.
Crypto can’t afford the cost of mistrust
Trust is easier lost than gainedarticularly in a nascent tech-driven industry like crypto that already has an abundance of critics and naysayers.
Belief in the future potential of crypto-based systems is key to their success. Some call it speculation but it’s such a belief that inspires early adopters to jump on the bandwagon.
Be it HODLing despite market downturns or acquiring property in the metaverse, crypto thrives on the promise of a better future.
The beauty (and significance) of it all is that it’s actually possible and not merely a myth. This is also why it bounced back time and again despite volatility, regulatory onslaughts and whatnot.
But everything lies in jeopardy when respected and revered faces end up on the wrong side of the profiteering game.
Severe allegations and revelations thus shook the industry’s core in 2022, with massive ripple effects that may continue throughout 2023. The trust was hampered significantly if not lost completely.
Unfortunately, recent fiascos imposed a hefty price on the hitherto burgeoning crypto industry. The total financial losses across protocols amounted to over $3 billion in 2022.
And now layoffs are continuing en masse, with more than 26,000 employees losing their jobs. That’s essentially the price of mistrust something the industry can’t afford to pay for long.
One must look the devil in…
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