How trust runs the world

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Trust is a key factor in all aspects of life. Trust is demanded in all activities: in personal relationships, taking a taxi, shopping, investing, even going outside for a walk. Every daily task requires trust.

If you think for a moment about your daily routine, you will notice how everything you do requires trust. Let’s imagine the scenario of an average person. The simple act of going to sleep at night requires confidence to know that you will wake up the next day or that the alarm clock will go off at the time you programmed it. Eating breakfast requires trust, both in the product and its brand (knowing that what the label says is totally true) and in whoever prepares it if it’s not you. Then, going out to work and being there all day is associated with trusting your employer is going to pay for the day’s work. Lastly, if you decide to take a shower, you trust the water will not be hot enough to burn your body. ¿Do you note it? Everything requires trust.

Now, regarding trust in interpersonal relationships, there is a specific section that I want to do. Have you ever heard the phrase “I need you to trust me” or “If you don’t trust me, nothing makes sense” It is a fairly common request. People often demand trust from others. This becomes essential in life. For example, imagine that from now on, no one trusts you. Everything you say or do is questioned, and your promises are no longer believed. That scenario is going to make it impossible for you to have a relationship, buy, sell, and do other tasks.

This example tells us trust is important, not only in a linear sense, but it moves in both directions. You need to trust as much as you need others to trust you.

A seller will not accept money from a buyer he does not trust, just as a buyer will never purchase a product from an unreliable seller. This means trust, in addition to being bidirectional, applies not only to aspects of personal and interpersonal life but also to social ones.

The great dilemma with trust is that it’s too fragile, it’s gained little by little and destroyed in a second. According to Isaac Watts, learning to trust is one of the most difficult tasks in life.

We can see examples in our society. If you are looking for a job, no matter how much you talk to someone about your professional skills and achievements, you should present your qualifications and references from previous jobs to corroborate what you say. Also, if you go to the bank to ask for a loan, many times you will need to prove you have an employer. Then, an identification of your workplace becomes essential. This is the case, many times.

This happens because, unfortunately, human beings are not very trustworthy. That is to say, the average person usually lies, cheats, and always seeks their benefit over others, making our minds programmed to trust family and close friends, but not unknown people.

At this point, the following reasoning arises: If trust is everything, but we usually don’t trust, then how can we live in a society based on trust? Well, this has been a concern that our ancestors tried to solve. One of the solutions they found was to create institutions.

Under this premise, we can conclude that institutions play a fundamental role in trust. Many times a person is not trusted, but an institution is. Let’s look at this case in more detail!

Trust and Institutions

The fact that institutions are trusted over independent people is not a matter of caprice. The many situations of theft, lies, and scams committed by people make it impossible to trust a person who is a total stranger or who is seen for the first time. This fact is unfortunate but real.

It’s at this point where institutions play a fundamental role. Trust is not something that is given away. Institutions must earn trust through mechanisms such as competence, professionalism, responsibility, and honesty. On the other hand, the institution is not a single person, but there are several divided into different departments and even with relationships to other institutions. This means they can act as a third party or mediator between two parties who want to make an agreement.

For example, if we need a plane ticket, we need to present our data supported by an identity document that we did not create ourselves, but that was prepared by someone else; or, we buy with a card that certifies that the money is real. For this reason, in many places cash is not accepted to pay, but card only. In this way, they make sure that it is not fake money. They don’t trust you, but they do trust the bank supports that card.

Now, do you remember that we said that trust was two-way? For example, if you are going to select an airline, you do it depending on the prestige it has, the comments of others, but, above all, trusting other institutions that are in charge of verifying the correct operation of the plane, the mental state of the crew and others.

If a stranger asks you to get on his plane, you will probably say no. However, it’s quite common to travel on a certain airline plane, even when you have no idea who the pilot is. This is possible since there are institutions that can give certainty about the pilot’s work, making him look reliable in your eyes.

However, institutions can also fail. History has several records of how institutions can become corrupt, cheat and steal from others. When an institution fails, it causes the population to lose confidence and question how other institutions can also fail. A state of general distrust is created.

This is a serious problem. The lack of confidence of people can contribute to no one trusting anyone. This collective distrust creates hostility, makes teamwork difficult, and leads to a significant downturn in the economy, Therefore, the civic and moral values of society are destroyed, and the result is total chaos.

From what has been seen so far, it’s possible to say: just as trust builds civilization, lack of trust destroys it.

The unstoppable boom of cryptocurrencies

I now propose a look at cryptocurrencies. Yes, I know, you are probably wondering why to talk about cryptocurrencies at the same time we’re talking about trust. It’s a paradox, since cryptocurrencies are unreliable for many.

The truth is, cryptocurrencies are currently a great attraction. On the one hand, there are those who defend cryptocurrencies tooth and nail. They talk about its many benefits and encourage others to join their group in a kind of recruitment. On the other hand, there are the enemies of cryptocurrencies. In this group are those who usually associate this currency with a scam or temporary fashion and, therefore, mistrust it.

When speaking from cryptocurrencies, it can be said that one of its fundamental objectives is to innovate in trust. As seen above, trust is fundamental to human civilization, and crypto intends to innovate on this trust. However, this fact makes them something incredibly good for many. For others, it’s the opposite.

When talking about this topic, we must mention technologies. In essence, cryptos are nothing more than digital currencies, developed or supported by cryptography and blockchain technologies, creating a decentralized computing system, far from the way we know banks to operate.

Through this decentralization, security is guaranteed and the role of the intermediary is eliminated. Also, an attempt is made to build an unalterable system, incapable of being corrupted, broken, or hacked.

Perhaps we can get lost in so much technical and confusing terminology, but the important thing is to realize the amazing implications this can have.

For example, our current economic ecosystem works as follows: you require a loan, therefore you must go to a bank. Once there, you will hold a meeting with the person in charge. You will be asked for information such as proof of employment, credit history, income statements, or other documents that attest to your words’ veracity.

Basically, this entire process is carried out by the bank employee as a way to protect his institution, to ensure you’re trustworthy. This person doesn’t know you directly, he must trust other institutions with which you have had contact beforehand, say, works, a school, stores. They can also look at other aspects, such as the fact you have no debt or late payments of any kind.

In this “confidence test” this bank employee, as well as the other institutions or people in which he relays to carry out his verifications, are nothing more than intermediaries. Their role is to make sure you can pass “the exam”. On a global level, we can realize there are millions of “verifiers” in the world, people whose job is simply to ensure the trustworthiness of others. Generally not by thyself, but grouped in institutions that regulate these processes. Say banks, law firms, government programs, insurance companies, schools, and others.

Until now, it’s necessary to do it, there’s no better way. There is no single person or organism capable of answering for everyone. Automation of this process is necessary, to achieve a notable reduction in its failures. Here’s where cryptocurrencies come in.

We could put Uber as an example and how it has managed to automate the taxi service. In the same way, crypto will achieve the automation of all these “trust examiners” or “verifiers”.

Beyond concerns about the impact it will have on disparate income generation or job security, one thing is for sure, in the end, it will be accepted and embraced. We will all implement it in our lives and its use will become common. The use of crypto will be something natural, it will be as normal as using a cell phone, or like our example, Uber. The reason is clear, it will make our economic transactions and life simpler, all money-related procedures will be a lot easier.

Currently, we all know how it works to obtain that loan we need. It’s a difficult experience. We are forced to deal with institutions run by other people whose premise is mistrust. We are required to carry out meetings, endless paperwork, calls, deliver large amounts of personal information, and many other verifications that take up too much time and effort.

And it is that the entire human verification system is chaos, completely fallible, and full of variables impossible to determine. If, by chance, you are going to renew your license and the person in charge of assisting you is having a bad day… the slightest phrase can be a source of tension, and it’s quite likely you will leave with your car keys in your pocket and asking for a lift. In the same way, if you are faced with an employee in an air of power and superiority, in a second you can lose that loan you need to buy a house or cover your child’s tuition.

Inevitably, the relationship system between banks, insurance companies, government, and other institutions does not work particularly well. And for us, as individuals, privacy and our individual freedom is becoming more important every day.

For all these reasons, it’s not unreasonable to say cryptos are here to stay and will eventually prevail. This will happen naturally and inevitably.

Of course, it will not be a perfect process, it may even seem chaotic and messy at times, but this is necessary. All this institutional verification infrastructure has to be rebuilt from the ground. To achieve this, mistakes and failures will occur, the same ones that previous institutions have made throughout all of human history to reach the current point.

That’s all for now.

Gulpes,

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