Trust is 🔑 to interaction, including when you work with/for or transact with someone. It's a core reason contracts and money was invented: if you can't inherently trust one another, the next best alternate is rely on something that you both trust - which historically has been a human-run centralized authority (government, bank, court system, corporation, etc).
"Crypto enables software to operate autonomously and make commitments/guarantees on how it will behave". - Chris Dixon, a16z (see his awesome podcast for more info)
While software has always followed logic, it's historically been managed (and can be modified) by people. Crypto ensures software doesn't change behavior through the power of a network (strength in numbers!).
So what does this really mean? For the first time, we can rely on software to be our trust partner, instead of people. This enables groups of people to collectively work together in ways that was never possible before.
How does it work?
The magic of crypto is that it incentivizes a decentralized network of peers that don't know or trust each other to cooperate by offering rewards (known as cryptocurrency) as an incentive.
Each node has a copy of the same software and the same state (database of transactions), the latter of which is known as a blockchain (literally: a chain of blocks). Net-new transactions must achieve distributed consensus amongst all nodes, and previous transactions cannot be tampered with.
<aside> ✅ Transactions are transparent, immutable, uncensorable and verifiable 24/7/365.
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Because human-run systems can be arbitrary, biased, and censored.
https://twitter.com/bantg/status/1391748660459941894
Centralization is generally more cost-efficient and has a minimum reasonable quality bar.
Decentralization is more resilient, more agile, and less prone to influence/censorship.
Wikipedia has 90X more content compared to Brittanica with similar accuracy, ~600 new articles / day & 2 edits per second by 130K unpaid editors globally.