What does the term "trustless" imply in a transaction system?

The term "trustless" in a transaction system implies that trust is not placed in any single party or reputation-based system, but rather built into the structure of the system itself. This concept is particularly prevalent in blockchain technology, where a decentralized network of nodes independently verifies transactions and maintains consensus through cryptographic methods and protocols. These mechanisms ensure the integrity of transactions without requiring any one individual or organization to be trusted.

In contrast to systems that rely on a central authority or personal trust, a trustless system operates on the principle that participants can engage in transactions with confidence, as the system's design and protocol enforce the rules and validate the transactions. This helps mitigate issues like fraud and manipulation, as the underlying technology ensures that all actions are transparent and verifiable by anyone in the network. Thus, the term "trustless" aptly encapsulates a system that safeguards against the need for interpersonal trust while still ensuring security and validity through its architecture.