On Trust

---------

Trust, a seemingly simple concept, is a remarkable cornerstone of societal interactions. Rahim Taghizadegan, an economist, refers to trust as a 'capital good.' This perspective underscores its valuable role in our societies and economies. Indeed, trust has the power to grease the wheels of human transactions, making them more efficient and cost-effective.

When trust is established between individuals or communities, it significantly reduces the cost of production. This is because trust mitigates the need for expensive processes like verification and the need for physical deterrents like walls or security systems. Unfortunately, poorer regions often lack trust, resulting in high expenditures on security. This, in turn, causes goods and services to be more expensive. Scammers spoil things for everybody.

However, trust is a double-edged sword. An abundance of trust can lead to exploitation by the trusted party. Over time, such misuse of trust can trigger the downfall of the entire system built upon it.

In this context, the solution is a verification system that is affordable and effective. Bitcoin, with its decentralized and transparent structure, stands as a testament to this concept. Running a node means that you can verify and cheap verification obviates the need for trust. Bitcoin represents the best system, where we get the benefits of trust, but without the obvious possibility for abuse.