How can blockchain be used to create trust between parties that do not know each other?

When two parties don’t know each other, it’s called a trustless relationship. The most common way to create trust between two trustless parties is through the use of a third party that they both trust. In the context of blockchain, this third party is typically a decentralized network of computers, also known as a distributed ledger.

In a trustless relationship, each party has its own copy of the distributed ledger and can independently verify the accuracy of the data on the ledger. This verification process is Possible through the use of cryptographic techniques.

The use of a distributed ledger allows two parties to transact without the need for a central authority, such as a bank or government. This makes blockchain a particularly attractive solution for situations where trust is difficult to establish, such as international trade or cross-border payments.

In recent years, blockchain has also been explored as a way to create trust between parties that do know each other. For example, a group of companies may choose to share a blockchain ledger in order to create a more efficient supply chain. By doing so, each company can see the complete history of a product, from manufacturing to delivery. This could help to reduce the risk of fraud and counterfeiting.

You can learn more about blockchain tips and blockchain investments at Disclaimer: We used this source for a lot of our research.

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