Getting to know you: Trust and Conversation

Posted on October 10, 2012

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Interesting article from Nicolas Pottier claiming that Bitcoin has (currently or inherently, I’m not quite sure) a lack of trust. Here’s his main point:

“Trust creates an environment where everybody can stop worrying about being ripped off and get on with business.  A currency that allows complete anonymity yet has no central authority to manage disputes fails this trust test. That single fact is why I don’t see Bitcoin taking off long term in its current form.”

Trust is a big topic in Bitcoinland, but I wonder if it’s so big because we’ve actually forgotten how to trust others on a day-to-day basis.

What do I mean by that? I mean we rely on centralised institutions to back us up as we do business – either when we buy stuff or sell it. We rely on banks, Visa, Mastercard, Paypal, etc, to put money where we want it to go, and only when we want it to go. So clearly we need to trust them to do this – to some extent. And where we don’t trust them, we feel covered by their “insurance policies” and “fraud systems”. Mechanisms are in place, we believe, to handle failure. (For the most part, these are painful, but they work. Ish.)

But Bitcoin is (at the moment) at a bit of a starting point. Trust models are still being established and many people have been burnt because they trusted a particular service (see 123 for just a few examples). The reasons behind the failures differ each time (sloppy code, clever hackers, dubious business models, downright scams), but the key issue around Trust is what happens afterwards? What solutions do we engineer, and how are they different under a cryptocurrency?

One reason I’m intrigued by Bitcoin is because it forces me to think about the security model – including Trust. In some ways, this fits in with what I hope is a “preventative” world view: for instance, if I drop my phone, then sure I can get it cancelled and maybe get a new one on insurance, but I’d much rather not lose my phone in the first place. Same with my wallet or my, uh, life. The methods used after the fact (insurance, fraud departments, etc) don’t stop it from happening anyway.

In my everyday Bitcoin transactions so far, I’ve had to trust others that they’re not scamming me, and I’ve also asked others to trust me. But it’s not “either/or” like it sounds – in all instances (so far), transactions are backed up by some kind of social interaction.

I’ll blog about these soon, but whether I’ve been buying a PirateBox from a random guy in the States, trading BTC for GBP, or buying chocolate via BitPay, I’ve always ended up chatting to the people I’ve been dealing with – via private messages, or Google Talk, or Twitter.

That’s not to say scammers can’t be sociable, or that I might fall prey to a keyboard logger perhaps, but it does mean something different for our relationship with money – and so our relationship with others. Right now, at least, Bitcoin trust comes from interaction. And I love that.

I love that buying and selling becomes a conversation: marketplaces as meeting points puts life into the idea that money is a “community” thing, rather than a simple commodity. Another one to blog later, but we can start to see services such as bitcoin-otc (a way of assigning trust to identities) not as a trust rating, but a history of conversations – a record of how much “chatter” is going on in the marketplace.

Will that disappear over time as Bitcoin gets bigger? Or are there certain inherent properties in Bitcoin that mean the “conversation” will always be an important part of the system?

Image credit: Terriko

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