The Decentralization of Trust

Forget Bitcoin. It’s a symptom. Forget even Blockchain. It’s big – but it’s technology. That makes it a tool. Which means it’s used at our will. And that will is the real story. Our will is always the real story – why do we build the tools we do? What is revolutionary is that we’ve finally found a way to decentralize trust. That runs against the very nature of how we’ve defined trust for centuries.

And that’s the big deal.

Trust began by being very intimate – ruled by our instincts in a face-to-face context. But for the last thousand years, our history has been all about concentration and the mass of everything – including whom we trust. We have consolidated our defense, our government, our commerce and our culture. In doing so, we have also consolidated our trust in a few all-powerful institutions.

But the past 20 years have been all about decentralization and tearing down power structures, as we invent new technologies to let us do that. In that vien, Blockchain is a doozy. It will change everything. But it’s only a big deal because we’re exerting our will to make it a big deal. And the “why” behind that is what I’m focusing on.

For right or wrong, we have now decided we’d rather trust distribution than centralization. There is much evidence to support that view. Concentration of power also means concentration of risk. The opportunity for corruption skyrockets. Big things tend to rot from the inside out. This is not a new discovery on our part. We’ve known for at least a few centuries that “absolute power corrupts absolutely.”

As the world consolidated it also became more corrupt. But it was always a trade off we felt we had to make. Again, the collective will of the people is the story thread to follow here. Consolidation brought many benefits. We wouldn’t be where we are today if it wasn’t for hierarchies, in one form or another. So we willing subjugated ourselves to someone – somewhere – hoping to maintain a delicate balance where the risk of corruption was outweighed by a personal gain. I remember asking the Atlantic’s noted correspondent, James Fallows, a question when I met him once in China. I asked how the average Chinese citizen could tolerate the paradoxical mix of rampant economical entrepreneurialism and crushing ideological totalitarianism. His answer was, “As long as their lives are better today than they were yesterday, and promise to be even better tomorrow, they’ll tolerate it.”

That pretty much summarizes our attitudes towards control. We tolerated it because if we wanted our lives to continue to improve, we really didn’t have a choice. But perhaps we do now. And that possibility has pushed our collective will away from consolidated power hubs and towards decentralized networks. Blockchain gives us another way to do that. It promises a way to work around Big Money, Big Banks, Big Government and Big Business. We are eager to do so. Why? Because up to now we have had to place our trust in these centralized institutions and that trust has been consistently abused. But perhaps Blockchain technology has found a way to distribute trust in a foolproof way. It appears to offer a way to make everything better without the historic tradeoff of subjugating ourselves to anyone.

However, when we move our trust to a network we also make that trust subject to unanticipated network effects. That may be the new trade-off we have to make. Increasingly, our technology is dependent on networks, which – by their nature – are complex adaptive systems. That’s why I keep preaching the same message – we have to understand complexity. We must accept that complexity has interaction affects we could never successfully predict.

It’s an interesting swap to consider – control for complexity. Control has always offered us the faint comfort of an illusion of predictability. We hoped that someone who knew more than we did was manning the controls. This is new territory for us. Will it be better? Who can say? But we seem to building an irreversible head of steam in that direction.

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