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Crypto community members will likely be familiar with mantras like “Don’t trust, check!” or the “law of the code”. Both refer to the promises of greater transparency and audibility and to a technology that offers to replace powerful fallible and corruptible actors with a actually functional rule-based order, guaranteed through deterministic calculations.
The desire to do without the need to trust third-party actors is a pillar for many cryptocurrency creators and users. Bitcoin (BTC), after all, was invented soon after the 2008 financial crisis, and the abuse of authority by powerful actors and institutions continued to make itself felt during the Great Recession. Crypto has continued to attract more and more enthusiasts against the backdrop of the social, political and economic crisis.
However, a paper first published by a group of researchers this August and circulated via the Oxford University Law School blog on October 27 opposes the conceptualization of blockchain as a matter of trust – or its absence. .
Instead, the document proposes to understand the blockchain as a “trust machine”: a technology designed to maximize the degree of trust in the system as a means of, indirectly, reduce the need for interpersonal trust. The paper’s argument is based on a careful analysis of the distinction between trust and security, each of which is a complex set of ideas in its own right. However, for all their internal complexity, trust and security, each implies a fundamentally different interpretation of the nature of the social environment.
Trust, through its various definitions, presupposes a recognition of risk and uncertainty: one can choose to consciously trust another agent through a “leap of faith” or “commitment”, or as a result of a rational choice based on on a calculation that it is in the interest of a third party to act in a particular way. It can also be trusted more tacitly, through routine actions, where the background of risk is less explicitly recognized.
Trust, on the other hand, presupposes the predictability of systems or institutions. These predictable systems, in the case of the blockchain, refer to the technological design of a protocol (i.e., one that is designed to mint some degree of new coins in a given range), an open-source code repository, and the mathematical properties of hash functions and public-private key cryptography.
Blockchain systems also attempt to maximize the predictability of a network of actor decisions by means of theoretical gaming mechanisms and economic incentives, and by providing a collectively verifiable record of the sequence of actions in a given ecosystem.
In the course of their argument, however, the authors of the paper complicate this view of trust, which they argue is based on the denial that blockchain systems are irreducibly hybrid, involving both social and technical components. They make their case by exploring the true asymmetries in resources and knowledge – and therefore power – between the various actors in blockchain networks, discovering the blend of trust, trust and even faith, which is involved in their daily operations.
“The governance of most blockchain-based systems is highly centralized: on-chain governance is inherently plutocratic, dominated by a few large operators or individuals who control most of the mineral resources and / or token holding, while governance is off -chain very often operates as a technocracy, with a few influential actors dominating both the front and backstage stages. “
Rather than evoking an alternative and ideal scenario, in which dependency and dominance relationships could magically be eliminated, the paper concludes with an exploration of what carefully understood blockchain governance actually implies; and what it could evolve into if we fully recognize the power groups that inevitably shape its infrastructure.
