Informal Localized Trust

"One of the biggest value propositions of crypto is scalable governance without informal localized trust."

That was one of the many lines in Mike Maples Jr.'s piece entitled 'Crypto Commons' that kinda stopped me in my tracks and gave me some intellectual jerky.

I want to focus on what Mike called informal localized trust in this post today though. While I agree with Mike that informal localized trust will be surpassed in lieu of a more binding, comprehensive and inclusive form of trust, I also believe that whatever shape or form or rules that the new form of trust takes, it will share atleast a few similarities with the informal localized trust that came before it.

To recognize those similarities in the future, I think it's important to unpack what informal localized trust actually is today.

After my run yesterday, I settled on the following formula or definition that encompasses everything that informal localized trust is today: Trust in a reasonable probability of (something [happening]) based on what you think you know of (something [happening]).

What is interesting is despite the word 'localized' being employed, informal localized trust can actually extend across the world. To provide a few prominent examples we can look at Visa credit card transactions and the US dollar. In both cases they rely in trust in a reasonable probability that merchants will accept them. In the case of a transaction with your Visa, this is based on your knowledge that it is accepted most places around the world because merchants eventually get paid. When it comes to the US dollar, people accept it because they think it's backed by the power and promise of the US government.

They will probably be accepted. This probabilty is derived from reason, an amazing phenomenon common to all humans that first became apparent from out of language. And trust or belief (i.e. the basic buy-in from individuals) is what binds these elements and allows for all subsequent action and events to occur.

The cases and instances where that reason, trust and belief runs out and fails to hold true, help to highlight the illogical limits of informal localized trust.

I'll end things here, knowing that much more could be said. In the days and weeks ahead I will come back to this idea of informal localized trust and trying to point out the elements that will most likely remain in the universal, verifiable systems of trust that may arise in the future based on blockchain technology.