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By Laurent Dedenis
Going by Oxford English Dictionary, trust is defined as ‘firm belief in the reliability, truth, or ability of someone or something’. It is a concept like any other — love, duty, or responsibility but an incredibly important one. In fact, trust is a fundamental element of social capital — a key contributor to sustaining well-being outcomes, including economic development.
I am not certain you feel the same, but it seems that ‘trust’, ‘The Trust’ has been at the center of many more discussions since the beginning of the 21st century. Maybe more than any time in the entire 20th century? In fact, “trust” is now at the core of the most influential segments of our modern societies: entertainment, media, politics, business as well as our overall interactions with others.
But how far back does trust go? Did it only begin in the formalization of agreements during the crusades when knights entrusted their land to certain authorities in case they did not return? Or was it earlier during the Romans? Or earlier than that?
Surely, a more productive course of enquiry is to ask how trust manifests in our world of trillion dollar commerce, what does it cost, and, going further, talk about the novel way in which it is being upended.
From Tribes to Consortiums
It is not an exaggeration to say that even in the 21st-century, our world is still full of tribes. From our gatherings around a fire in ancient times to our modern boardroom meetings, the fundamental nature of being part of a tribe is trust. It is the glue that makes trade happen and leads to alliances, business or social. And wherever there is a lack of it, trusted intermediaries must come into play.
Powerful medieval guilds, colonizing merchant groups such as the various East India companies, and the modern consortium came together around shared values. Surely all that was not instantaneous. Building trust requires a long time simply because it stands on the shoulders of reputation. And as Buffett says, “It takes 20 years to build a reputation and five minutes to ruin it.”
Never mind the part about ruin, which we will come to shortly; today there is no denying the influence that alliances/consortium have on our daily lives. Today, the World Wide Web, SWIFT, CERN, Hulu, Signature Travel Network, and numerous other alliances form the backbone of our lives. Surprisingly, some massive organizations of today such as Airbus started off as a consortium as well.
But trust, the way it has been managed, has its dark side too. History, as well as the present time, is filled with countless examples of collusion. In the recent past, banking, charities, retail, and, sadly, even pharma, have all suffered from the erosion of trust. What every example shows is how fragile and easily manipulable trust is, at least the way it has been managed historically.
A New Generation of Trust
We are currently in the blockchain hype cycle. Some call it a fancy distributed database, while others call it a problem looking for a solution, some are in awe of its mathematical elegance, and others are simply turned off by its colossal inefficiency. Regardless, the skeptics have known all along that it won’t cure cancer. I agree.
But we are on the topic of trust, so let me give my two cents’ worth. I consider blockchain a ‘Controllable Trust Interface’, and it holds the potential to end the timeless search for a trust that is easy to establish and cannot be manipulated. It holds the promise of creating trust among strangers, beyond borders, and instantaneously.
In some way, the new generation of trust is a new standard for trust, an instantaneous and permanent version available for anyone to make use of and collaborate with.
I have always maintained that collaboration is at the heart of the modern enterprise. More things can be achieved when we view the world as a place of expanding possibilities instead of a zero-sum game. But what’s at the heart of collaboration?
You might have guessed where I am taking this. All this seems like unraveling a Matryoshka doll, where underneath the expanding possibilities is collaboration, underlying collaboration is trust among participants, and underlying trust among participants is trust in the system. Blockchain, here we come!
The notion of shared public ledgers may not sound revolutionary or sexy. Neither did double-entry book-keeping or joint-stock companies. Yet, like them, the blockchain is an apparently mundane process that has the potential to transform how people and businesses co-operate. …. The real innovation is not the digital coins themselves, but the trust machine that mints them — and which promises much more besides. Economist
The Consortium of Everyone
The elegance of blockchain lies in its ability to combine cryptography and consensus to achieve the holy grail of every group undertaking — trustlessness. The vast advancements in mathematics and computing have led us to a point where human corruptibility can be substituted with unbreakable verification. Now you and I can transact securely, doesn’t matter if we have not met in person, communicated digitally, or don’t have a common friend, as long as we have each other’s public address and a unique set of keys to open doors.
This powerful duo of math and computing will create a level playing field for all. Smaller businesses, restricted by the cost and time it takes to establish trust, until now, can start transacting in international markets confidently. Larger businesses can welcome competitors, and rather than playing offense or defense via information silos, can genuinely collaborate. And the individual mom and pop store need not fear being swindled out of their modest capital by transacting with strangers. The blockchain welcomes everyone into its fold and protects everyone.
So yes, all we need is trust, but in a whole new way. Welcome to the consortium of everyone, and stay tuned for part 2 of the Trust Trilogy where we explore further the new world of trust and how it’s creating new possibilities.