Blockchain scythes through trust factor
Just a few years ago it would have been unthinkable to get into a stranger’s car at night or stay in a stranger’s home. Surprisingly, today it is commonplace. Why? Why do we inherently trust strangers today in ways that would have been unimaginable in the past?
Companies such as Airbnb and Uber make this possible. They leverage online reviews to establish trust where it did not exist before. You’re far more likely to trust the accuracy of an Airbnb listing that has many supporting reviews than one that has none. These companies have leveraged a consensus of opinion from a collective of individuals to establish trust in the accuracy of a listing.
As beings of a tribal nature, we trust the wisdom of the collective despite not trusting the individuals themselves. This is what makes Airbnb and Uber possible today and impossible such a short time ago.
Trust is the very foundation of human interactions. Trust is what makes society work. We wouldn’t use banks if we didn’t trust them with our money. We wouldn’t go to doctors if we didn’t trust them with our lives. We wouldn’t support our politicians and our government if we didn’t trust them to manage our country and our future.
The challenge is that trust is hard, especially in the age of the internet. We’ve created complex regulatory processes around trying to prove that people or businesses are who they say they are. We’ve seen the rise of whole industries dedicated to proving that people can trust that they will receive the product, service or experience they expect. Our legal and banking systems are largely built around trying to establish trust between individuals or businesses. Trade, commerce and co-operation in society wouldn’t exist without it. Trust is hard.
Historically, we have always had to rely on someone acting as an authority to establish trust. Governments issue passports to prove that you are who you say you are. Companies such as Airbnb act as a trusted party between potential guests and hosts. Law firms and our judicial systems act as suppliers of trust in agreements. Banking counterparties act as suppliers of trust in trade. Government regulators act as trusted overseers in production of goods and services. Trust is everywhere and it is complex. Having to add middlemen and processes to most human interactions to build or improve trust adds incredible costs to doing business.
So what does all of this have to do with the blockchain? Forget all the mumbo jumbo and technobabble. At its simplest, a blockchain is a concept for two or more parties to share information without having to trust each other or a specific third party. The blockchain itself acts as a medium of trust between parties. Similarly to the Airbnb example, it provides for a consensus of opinion from a collective of participants to establish trust in a piece of shared knowledge. However, instead of reviews, the blockchain can theoretically contain any shared information.
The blockchain concept allows us to take a piece of information and distribute it across a network in a means that it can never be changed. That piece of information can only ever be amended with a history for all to see. That concept, woven into a web of distributed computing and cryptography, sets a foundation for a new level of trust on the internet unlike we have ever seen. Once we have a platform upon which information can be stored, never revoked and changed only with everyone knowing the history of the changes, we have a powerful resource for building new networks of trust.
This is the fundamental truth and the real source of innovation that we’ve never seen before. Blockchain isn’t efficient or useful within organisations that don’t have a trust problem. It isn’t efficient or useful between parties that trust each other or agree on a trusted third-party authority. It is, however, incredibly useful for situations where two or more parties need to share information in a trustless fashion. This is the game-changing element that is driving hype that many believe can change the world.
However, it is still early days and collectively we are still working out how to turn the concept into a workable reality.
• Denis Pitcher is a software and technology solutions consultant with an interest in exploring the potential of blockchain and distributed-ledger technologies. He is also tech co-founder and chief architect of resQwest.com, a global tourism technology solutions provider. He can be reached at email@example.com