Distributed trust: Dandelion’s perspective

3 min readJun 1, 2023


Blockchain technology may seem complex, but at its core, it offers a simple yet powerful concept: distributed trust.

This means that you can trust the network itself without having to rely on any specific entity within it. It’s like the trust we had when using precious metal coins for transactions but on a much larger scale.

We asked Paul Chafe, Dandelion Network’s CSO and Co-Founder, about what distributed trust really means and why it matters more than one might think.

The cost of trust in centralized systems

To grasp the significance of this, consider a simple fact: ten trillion dollars is spent annually to move goods and people across the world.

This includes the expenses associated with planes, trains, ships, trucks, roads, and various other logistics.

However, the cost of moving money itself amounts to three trillion dollars per year. This is comparable to the cost of physical transportation, despite the fact that payment networks require significantly less infrastructure than the transportation industry.

Clearly, there is significant inefficiency in the traditional systems that were built decades ago, based on processes developed during the industrial revolution. These systems are difficult to change, and the risk of breaking them holds back innovation.

Cross-border payments can be delayed for weeks, letters of credit still rely on paper-based processes, and fees for these services remain high because of the need for intermediary banks.

Introducing distributed trust

The role of payment networks goes beyond the transactions themselves; it is about trust. It’s about the trust that you will be paid for the goods or services you provide and the trust that you can exchange what you’ve been paid for to get what you need.

Distributed trust can offer these guarantees without the monopolistic network tariffs, foreign exchange costs, and frustrations associated with traditional systems.

This applies not only to transactions but also to supply chains, letters of credit, insurance markets, and the authentication and verification of every step in the economy. Ultimately, this transformation will liberate much more than just the three trillion dollars currently absorbed by transaction systems.

Where blockchain comes in

The meteoric rise of Bitcoin, the original blockchain network, is evidence of the value proposition of distributed trust.

However, the proof-of-work protocol on which it is built consumes an unsustainable amount of electrical power. Layer 2 solutions, which treat a collection of transactions as a single transaction, inevitably compromise security.

Proof-of-stake systems are an improvement, but they still face scalability issues and are susceptible to the same centralization problems found in traditional banking. For example, the transition to Proof-of-Stake has resulted in Ethereum being controlled by the top six crypto exchanges, which is far from the ideal vision of distributed trust.

Realizing the full potential of distributed trust requires new technology that is secure, scalable, and decentralized. This is precisely what we are working on at Dandelion. Our team is focused on developing cutting-edge solutions that address the limitations of existing blockchain networks.

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