While the business benefits to blockchain technology adoption continue to surface, the shift to a decentralized (“trustless”) system has raised some interesting revelations about analog trust vs. digital trust. As with most cutting-edge tech, there are inevitably some skeptics who are hesitant to implement blockchain’s distributed ledger technology – whether due to uncertainties about the market, the volatility of cryptocurrency, the challenges of embedding it into existing processes, or other tactical factors. More unexpectedly, though, some of those skeptics have qualms about the broader impact of blockchain on human trust as we know it. The intangible trust formed between humans has arguably been the cornerstone of our societies and economies since the beginning of time. Thus, it only makes sense that big-picture thinkers might wonder, philosophically, if we’re losing something foundational to our relationships and interactions in the process of upgrading our tech.
Examining how blockchain technology functions, however, one will likely surmise that it’s actually bolstering – even revolutionizing – the primordial trust that has built the world we live in. As Forbes contributor Jim Blasingame asserted recently, “Blockchain isn’t the end of trust, it’s the future of trust.” He goes on to point out, “You’ve heard there’s strength in numbers? In the Digital Age, there’s trust in numbers. So, how much digital trust do you need? Ten nodes? A hundred? A million?” in reference to the way information is distributed across a network of ledgers called ‘nodes’ – and their ability to make crucial information irrefutable. The use cases abound as each industry explores blockchain’s potential applications.
Take a business contract, for example. Previously, businesses were forced to rely upon paper contracts to keep agreements intact – but suppose the physical contracts were lost or damaged? The digital era solved for that problem by allowing the contracts to be uploaded and stored in the cloud. That solution, however, came with a new problem: the increased ease of forgeries and fraud; imagine how detectible it would be if someone tried to white-out and rewrite the terms in a physical contract, as opposed to using a program like Photoshop. This was one of the many gaps of analog trust that digital trust has now filled. Thanks to distributed ledger technology, a business contract can not only be digitally preserved, but time-stamped, authenticated, and encrypted across an entire network of nodes that jointly confirm its validity.
Of course, this revolutionary technology is poised to help us circumvent even bigger disasters. From the perspective of emerging-tech strategist Leo Jiang, the entire 2007-2008 financial meltdown can be attributed to the shortcomings of analog trust. “The root cause of the financial crisis lay in the structure of how trust is built and maintained within the world financial system,” he notes. “This crisis caused enormous financial loss to many individuals and fundamentally damaged citizens’ trust in their institutions.” This was, perhaps, the perfect time for blockchain technology to come into being – and it did immediately afterward, in 2008, thanks to an unknown inventor (or group of inventors) operating under the name Satoshi Nakamoto. In fact, the original announcement by Satoshi Nakamoto on Feb 11th 2009 highlights exactly why digital trust is the future. “I’ve developed a new open source P2P e-cash system called Bitcoin. It’s completely decentralized, with no central server or trusted parties, because everything is based on crypto proof instead of trust.”