Trust is a confident relationship with the unknown.
In 2016, the Alibaba Group overtook Walmart as the world’s largest retailer.
Trust is the conduit through which new ideas travel. Trust drives change. Throughout history, humans have demonstrated a remarkable propensity to change the way we do things–bank, trade, travel, consume, learn and date.
When one party has less information than the other, economists call it information asymmetry
Putnam argues that close-knit suburbs have given way to ‘exurbs’ and ‘edge cities’–vast anonymous places where people spend more time commuting to work, at the office and watching TV alone, and less time socializing with friends, neighbours, community groups and even family.
Out of such shared values comes trust, and trust has a large and measurable economic value
African-American men today have the worst health outcomes of all major racial, ethnic and demographic groups in the United States. The life expectancy of black men at age forty-five is three years less than for their white counterparts
When someone doesn’t trust their doctor, typically they stop going for check-ups or for care when they need it. The researchers deduced that, as a general principle, this has led to a decrease in life expectancy of 1.4 years among black men over forty-five, many black men trust their barbers far more than they trust their doctors.
The Panama Papers revealed that between 1977 and 2015, the firm Mossack Fonseca had created more than 200,000 offshore shell companies in tax havens around the world, for world leaders and their families including President Putin and Kojo Annan, son of the former UN secretary-general Kofi Annan, celebrities such as footballer Lionel Messi
In all, 29 of the billionaires featured in Forbes Magazine’s list of the world’s 500 richest people, 12 serving or former world leaders and 140 politicians were named in the Panama Papers. In terms of age groups, millennials are the most doubting. According to a 2015 survey conducted by the Harvard University Institute of Politics, 86 per cent of them distrust financial institutions. Three in four millennials ‘sometimes or never’ trust the federal government to do the right thing and a staggering 88 per cent ‘sometimes or never’ trust the media
Labaton Sucharow, a respected law firm based in the United States, conducted an independent survey to find out how financial insiders view other professionals within their industry. More than half of respondents believed that their competitors engaged in illegal or unethical behaviour. Nearly a quarter admitted they would engage in insider trading if they could get away with it and just under a third believed that financial services professionals might need to engage in illegal or unethical behaviour to be successful
Sociologists describe the innate tendency to associate and connect with people similar to us as homophily.
A friend or, say, a Facebook friend, is now viewed as twice as credible as a government leader
It is estimated there are more than 3 million blog posts written in the world per day.
The trust stack goes like this: first, we have to trust the idea; then the company; and, finally, we have to trust the other person (or in some instances a machine or robot).
Trust in new inventions doesn’t happen by accident. There are some universal psychological and emotional hurdles to overcome first. The conditions that enable that to happen are summed up in three key notions: the California Roll principle, the WIIFM factor (‘what’s in it for me’) and trust influencers. The California Roll principle is based on the underlying rule of combining something new with something familiar to make it ‘strangely familiar’.
Apple does it through a design feature Steve Jobs called ‘skeuomorphism’. It’s a catch-all term for when design cues are taken from common objects or elements in the physical world.
Investors will run through ‘what if’ scenarios when assessing a deal. Specifically, ‘What’s the worst that can happen when using this product or service?’ In the case of Airbnb, a lot can happen and has since happened. Airbnb’s success rests on having been able to get people to make that staggering leap of trust and overcome our natural ‘stranger danger’ bias.
Even if people don’t believe that vaccines cause harmful side-effects such as autism, the power of anti-vaccination stories is they evoke fearful emotions that undermine our trust, no matter what we might rationally think.
That doesn’t mean we all need to understand precisely how a technology functions, whether it was a combustion engine back then or a blockchain now. However, we do need to grasp what it can do and what it can give us. Until that chasm is crossed, we won’t abandon what we already have.
The typical American commuter spends on average more than fifty-two minutes per day stuck in traffic. That adds up to more than 4 billion hours of wasted time in the United States alone, time we could use in better ways. ‘People want to know what they will be able to do if they are freed from driving the car,’
Humans are not ‘risk mutual’ people. In other words, they don’t place the same weight on things going well as things going badly.
Trust influencers are groups of people who can disproportionately influence a significant change in the way we do something; they set new social norms.
Money can be anything–paper, coins, shells, beads or stone–as long as people have faith in its value. ‘How many of us have literal direct assurance of the existence of most items we regard as constituting our wealth?’ wrote Friedman. ‘Entries in a bank account, property certified by pieces of paper called share of stocks, and so on and on.’
The root problem with conventional currency is all the trust that’s required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust
For the first time in the history of humanity, there is the potential to create a permanent public record of who owns what, which no single person or third party controls or underwrites, and where we can all reliably agree on the correctness of what is written.
Every bitcoin transaction, however small, contains a difficult mathematical puzzle (known as a proof-of-work calculation) that has to be solved through trial and error. The puzzle works as evidence of the transaction’s legitimacy. Essentially, transaction-clearing responsibilities, which are traditionally managed by centralized banks, are now distributed into the hands of many miners and thousands of computers in the bitcoin network. Trust is shared out.
Bitcoin mines don’t just need hardcore processing power. They need cheap electricity, lots of it. One miner’s electric bill was so high police raided his house suspecting he was growing pot. ‘We thought it was a major grow operation… but this guy had some kind of business involving computers. I don’t know how many computer servers we found in his home,’ said a baffled DEA agent.
It is estimated that 70 per cent of the transactions on the bitcoin network are going through just four Chinese companies, mining powerhouses.
Digital currency is just the beginning. The truly revolutionary invention is the blockchain, the vast underlying trust architecture.
The DAO started out as a radical social experiment. Could a company run itself without executives, managers, a board or any type of chief? Could smart computer code make decisions and autonomously run the organization in place of individuals? And could a blockchain sit under it all as its digital ledger?
‘Ultimately, power is a zero sum game,’ Buterin says, ‘and if you talk about empowering the little guy, as much as you want to couch it in flowery terminology that makes it sound fluffy and good, you are necessarily disempowering the big guy. And personally I say screw the big guy. They have enough money already.’
Ethereum is designed to allow developers to spawn blockchain-based offerings that fall into three main categories or ‘buckets’. The first bucket is based on being able to transfer any kind of asset–from shares to concert tickets–in a fast and transparent way on the blockchain.
The second bucket of applications uses the blockchain to track the supply chain of products, from their provenance to the hands of the customer.
The DAO fund falls into the third, and perhaps most ambitious, bucket of blockchain applications: smart contracts. A smart contract is essentially a digital agreement, whether it’s for a loan, job or an investment, which lives on the blockchain.
Investment funding in blockchain-related start-ups has increased globally from an estimated $1.3 million in 2012 to more than $1.4 billion in 2016, according to PwC.