How Trust Runs the World (& Crypto)

This is a really insightful essay on the notion that trust is the base layer of all human relationships, but that humans do a lot of stuff that makes them untrustworthy and self-serving. The solution to which has been for societies to build institutions that enable people globally to trust each other and facilitate a means to collaborate.

Then the author proceeds to segue into crypto, and his observations that crypto may be the least trustworthy thing out there now.

I don’t agree with everything in this piece (and warning; there’s colorful language sprinkled throughout) – but there are some gems like “if trust builds a civilization, a lack of trust unravels it”. I’d say the same applies to relationships. There are plenty of other thought provoking insights that make this piece a worthy read in my opinion.

Thanks for that. Interesting discussion topic. I think that the article confuses two seemingly similar but different notions, trust vs aligned incentives, which is to say that there are institutions, policies, laws, social mores, codes of conduct, norms, etc, that we create in order to align incentives between individuals without having to ‘trust’ them per se but to expect behavior towards a mutually beneficial outcome.

There is a lot made of the fact that crypto is seeking to be infallible in a zero trust or ‘trustless’ environment and that probably appeals to a lot of people right now because trust in government and other public institutions is at an all time low in many places, especially in the US.

For the time being, ‘trustless’ in the crypto world appears to be synonymous with ‘tamper proof’. There is comfort in code that cannot be molested when it comes to money transfers. I imagine that the same will be true for identity in order to prevent identity theft. On the other hand, there are times when you may really want something not to be immutable forever because mistakes were made, circumstances have changed, or some other reason to roll back something that had unintended consequences. Therefore, I don’t see the immutable, trustless code scenario as working in all situations.

What does interest me more is the potential to use crypto and blockchain to increase the degree and granularity of aligning incentives between people who are diverse in their wants, needs, desires and agendas but who can, for at least a transaction, share a common goal.

In a similar vein, Michael Lewis explores the problem of what happens when we no longer trust the referees we hire to police us in his podcast series, “Against the Rules”. I suspect it’s part of the impetus for us to want Gort to save us.