Good morning.
I’m Mitsui, a web3 researcher.
Every Saturday and Sunday at noon, we’ll deliver articles explaining basic vocabulary. We aim to keep each article concise enough for a quick read, while also providing content you can revisit and study.
Today’s topic is “Verification.”
Please watch until the very end!
Import
We routinely accept bank balances, transaction histories, and payment completion notifications as “correct.” We feel reassured seeing the numbers on our smartphone screens, believing payments are complete, and trust the amounts recorded in our passbooks as our assets. But is that really correct?
The “Trustless” philosophy championed by Web3 does not mean ceasing to trust people. It is an attempt to reestablish verifiability—a state where anyone can verify things for themselves—as a fundamental premise of society.
We are replacing the judgments we have entrusted under the name of “trust” with a transparent system that anyone can verify. That is the essence of verification in Web3.
What do we usually “believe” in?
When checking our balance at a bank ATM, we trust that the number displayed is correct. When we click the payment button during online shopping, we feel reassured upon seeing the “Payment Complete” screen. Why is that? It’s because we trust the organizations behind them—the banks and payment processors.
What underpins this trust? It is the organization’s brand, its long-standing track record, legal regulations, and the compensation system in place should any issues arise. In other words, we users are making a cost-cutting decision: we skip the hassle of verifying each transaction individually and instead place our trust in the organization.
Trust is essentially a mechanism that eliminates verification costs.
If we were to verify everything ourselves every single time, daily life would grind to a halt. That’s why we’ve entrusted decisions to trusted entities and prioritized efficiency. However, this structure has a critical flaw: when the party we trust makes a mistake or acts with malicious intent, we have no way to verify it.
If a bank’s balance display is incorrect, can we prove it? If a payment processor is improperly manipulating funds, can we detect it? In many cases, the answer is “no.” Because the data itself resides within the organization and is invisible to us.
How “Correctness” is Determined in Web2
The world of Web2, meaning most modern internet services, operates on centralized systems. Data is stored on corporate servers, and the companies themselves guarantee its accuracy. Google, Amazon, Meta, banks, payment processors—these companies possess massive data centers where all information is aggregated.
In this structure, “correctness” is determined by the administrator. If the bank says your account balance is ¥100,000, then it is ¥100,000. If Amazon says this item is included in your order history, then that is the fact. As the user, you have no means to overturn that judgment.
Of course, there are remedies available when problems arise. You can inquire about incorrect charges, and legal action is possible in cases of fraud. However, these are ultimately after-the-fact responses. And above all, the responsibility to prove that a problem occurred often lies with the user.
This structure has functioned because many people have judged companies to be trustworthy. However, data leaks, unauthorized access, corporate bankruptcies, system failures—events that shake trust are by no means rare. And once trust is broken, the damage is immense. Because we have entrusted everything to them.
The Premises Reexamined by Web3
Web3 poses the question: “Isn’t it possible that the administrator isn’t necessarily right?”
This is not to say you should distrust companies or organizations. Even the most well-intentioned organizations make mistakes. Systems have bugs, humans make errors, and sometimes malicious individuals infiltrate from within. The problem is that when such fraud or tampering occurs, users lack the means to detect and prove it.
The philosophy of Web3 brought about a fundamental shift here. It is the choice to eliminate the “trusted authority.” Rather than entrusting judgments of correctness to specific companies or servers, correctness is determined by publicly accessible records that anyone can verify. This is the core of verifiability in Web3.
The birth of Bitcoin embodied this philosophy. Even without trusting central banks or financial institutions, anyone could verify the validity of transactions by checking the records on the blockchain. It was a system that judged correctness not by the vague concept of trust, but by an objective standard: mathematical proof.
What does it mean to be verifiable?
So, what exactly does “verifiable” mean? In Web3, it consists of three elements.
First, anyone can view the transaction history. Blockchain is a public ledger where all transaction records are stored chronologically. Your transactions and others’ transactions are all recorded in the same ledger, and anyone can see its contents. No special permissions are required. Anyone in the world with an internet connection can view all records at any time.
Second, the rules are published as code. Web3 systems, especially smart contracts, have their operational rules written and published as program code. This means anyone can read and verify “how this system works.” This is vastly different from how outsiders cannot know how a bank’s internal systems operate.
Third, there are no entities with special privileges. Web2 systems always have administrators. Only administrators possess the authority to rewrite databases, suspend user accounts, or alter system operations. Web3, however, seeks to eliminate such privileged entities. Everyone follows the same rules, and no one can unilaterally make changes. That is the ideal state.
Why Verifiability Matters
The reason verifiability is important is not to “prevent” fraud, but to create a state where fraud “gets caught.” This distinction is crucial.
Every system has the potential for fraud. Perfect security does not exist. However, if people know fraud will be quickly detected, fewer will attempt it. This is the deterrent effect of transparency.
In blockchain, it is technically possible to alter a transaction once it has been recorded. However, executing such an alteration requires enormous computational resources, and above all, the tampering would be immediately detected by other participants. This is because all records are publicly visible. The cost and risk of tampering far outweigh any potential benefit gained from it. Therefore, fraud is unlikely to occur.
More importantly, it’s a design that minimizes damage the moment trust breaks down.
In Web2 systems, if a company goes bankrupt or a service shuts down, all data is lost. However, in Web3, data is decentralized and does not depend on any specific company. Even if the service provider disappears, the records on the blockchain remain.
This means it does not depend on any trusted entity. Trust can be betrayed at any time. Companies go bankrupt, systems fail, and people make mistakes. However, in a verifiable system, the damage can be localized. One failure does not cause everything to be lost.
Verification always incurs costs.
However, verifiability comes at a cost. That cost is expense.
Blockchain has all participants maintain every transaction record. This means data is replicated across thousands, even tens of thousands, of computers. This consumes far more storage than storing data on a single central server.
Furthermore, verifying the validity of transactions requires computation. Bitcoin mining is the prime example of this. It uses enormous amounts of electricity to perform calculations, thereby guaranteeing the validity of transactions. This consumes far more energy than a bank’s servers processing transactions.
Furthermore, it takes time. With blockchain, transactions require a certain amount of time to be confirmed. Bitcoin takes about 10 minutes, and Ethereum takes over ten seconds. Compared to credit card payments that complete instantly, this is clearly slow.
Why does this incur such high costs? It’s because achieving verifiability requires multiple independent entities to perform the same tasks. What a central server could handle with a single operation must be repeatedly executed by thousands of nodes. This is the inherent cost of distributed systems.
Web3 is neither faster nor cheaper than Web2 because of bugs or flaws. It is a fundamental trade-off between verifiability and scalability.
Centralized management is efficient, but it cannot be verified. Decentralization enables verification, but efficiency declines. Web3 prioritizes verifiability over efficiency, even at the cost of efficiency.
The Responsibility of “Not Having to Believe”
Web3 has given us the freedom to “not have to believe.” But with that freedom comes responsibility.
Having an account at a bank means entrusting everything to the bank. Even if you forget your password, you can go to the bank, verify your identity, and have it reissued. If there are any unauthorized transactions, the bank may compensate you. This is the advantage of having an administrator.
However, in Web3, you must manage your own private keys. If you lose your private key, your assets are lost forever. If you send funds to the wrong address, you cannot get them back. If a smart contract has a bug, you could lose your assets. And no one will compensate you for it.
This is a harsh world. Yet this is the very essence of “verifying for oneself.” Not relying on others for protection, but verifying and judging for oneself. In exchange for that freedom, users must accept responsibility.
To do so, understanding is essential. What is blockchain? What is a transaction? What is a smart contract? Without grasping these concepts, verification is impossible. Web3 demands advanced knowledge from its users.
Summary
Web3 is not a cold world that distrusts humans. It is an attempt to minimize the damage when trust is betrayed by providing a structure that can function without relying on anyone.
Verifiability is the foundation for simultaneously embracing freedom and responsibility. It means everyone can verify things for themselves. No one holds a privileged position. Everything is transparent, and everything is recorded.
Verifiability means not doubting, but being able to confirm. Creating a state where anyone can verify, rather than blindly trusting someone, is the true meaning of the “trustless” society Web3 aims to achieve.
Disclaimer：I carefully examine and write the information that I research, but since it is personally operated and there are many parts with English sources, there may be some paraphrasing or incorrect information. Please understand. Also, there may be introductions of Dapps, NFTs, and tokens in the articles, but there is absolutely no solicitation purpose. Please purchase and use them at your own risk.
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Author
mitsui
A web3 researcher. Operating the newsletter "web3 Research" delivered in five languages around the world.
Contact
The author is a web3 researcher based in Japan. If you have a project that is interested in expanding to Japan, please contact the following:
Telegram：@mitsui0x
*Please note that this newsletter translates articles that are originally in Japanese. There may be translation mistakes such as mistranslations or paraphrasing, so please understand in advance.