Bringing trust to Bitcoin

It appears Cal Peterson and Thomas Stringer are cooking up a little something interesting.The blurb is light on detail, but awfully specific:

eBay-style reviews for Bitcoin

Read and write reviews of Bitcoin users to help the community judge who is trustworthy

This, presumably, refers to the scheme whereby users on eBay accrue a numerical reputation score as they continue to pull off successful trades, and lose a bit of it when they mess up a transaction.

The Libertarian editor, Stringer, explained “Bitcoin is based on users trust, rather than central authorities, which has made users vulnerable to theft, via market places closing and taking users Bitcoin.” This is certainly the case, since MtGox failed it would be understandable if people were unwilling to deal with Bitcoin; unable to decide who to trust. This is, of course, entirely consistent with the theory of the Micklethwait Alpha, and should not be surprising.

Stringer continued “one of the major advancements of Bitcoin is the ability to have almost no fee transactions. But using the marketplace model has meant that this possibility hasn’t been fully utilised by vendors.” it is true that big name sites such as Silk Road and it’s replacements have dominated the scene by offering a comfortable buying experience and some semblance of order. Stringer believes that by relying on this model, vendors are committing to higher transaction fees than necessary.
trust-hub-logo“in a competitive industry, a few percent saved on every sale is potentially very valuable, it can build up very quickly. Using our trust rating on their site will mean that users will be able to know which independent sites are legit and which aren’t. Meaning that for those sellers who would prefer to sell via their own site they can do so, without the worry that they are loosing customers who only buy off people with reputation scores they trust (i.e. from people who sell via Ebay or amazon, Etsy etc.”
The product – named Trust Hub – is not finished, although interested parties can register their interest in it. Plenty of things can go wrong, not least with the scale of the system. A mere 500,000 people use Bitcoin (give or take a few million), which sounds like a lot (and it is if a good portion use it regularly) but it can get a lot worse than that. If it does take off, it will probably do so quickly and that’s the danger.
Cal Peterson, the techy one, is probably feeling a bit of pressure now to ensure his system not only works for today, but can scale up as Bitcoin grows. I would be very interested to find out how he’s put it together.

Simon Gibbs

Simon is a London based IT contractor and the proprietor of Libertarian Home. Working with logic and cause-and-effect each day he was naturally attracted to nerdy libertarianism and later to harshly logical Objectivism. Find him on Google+ 

  6 comments for “Bringing trust to Bitcoin

  1. Paul Marks
    Mar 25, 2014 at 7:45 am

    I do not think that BC has anything to do with “trust”. There is no promise involved in BC – no “I promise to pay the bearer…..” (gold, silver or whatever it is that was promised in return for bank notes). So trust has got nothing to do with it – because one is not being promised anything.

    As for the storage of BC – that is easy, BC are not “coins”, they do not require any real space to store. One can have one’s entire “stock” of BC at home – because they are just “special” numbers. Indeed this is the big selling point of BC – that one does not need an exchange (or other such) one can just store all the BC in a little “wallet” (and hide it where someone will never find it) and send the numbers directly to anyone who wants them (no need for a third party at all – no need for banks, or exchanges, or any third party). One can also smuggle (move) BC with much greater ease than one can move gold or silver.

    Millions of Pounds “worth” of BC can be stored in a tiny format – something so small that even the most eager border guards or airport police are not going to find it. That is the point of BC.

    There we are – a pro BC comment from Paul Marks. I am still not personally interested but I have presented the case fairly.

    • Mar 25, 2014 at 10:35 am

      Perhaps the OP is too vague, but this brings trust between users of the currency, you are right to point out that trust in the value of the currency is a gap.

      These are orthogonal concerns.

  2. TString
    Mar 25, 2014 at 11:00 am

    Paul, I think you have rather misunderstood the idea.

    TrustHub isn’t about the Bitcoin itself, about transaction between one wallet and another, it is about the overall transaction between a buyer and a seller. Currently vendors seeking to sell in btc online have no choice buy to use an e market place, or risk loosing out on allot of business from people who do not like buying from people they don’t know are trustworthy.

    This is why allot of sellers who have their own websites still sell via the centralised marketplaces, despite many who would prefer to have the freedom and lower costs of selling via their own website.

    So we allow users to rate transactions with vendors so that future buyers can know who they can trust.

    • Mar 25, 2014 at 6:25 pm

      I think what you are really doing (although I haven’t seen it) is unbundling trust functionality from marketplace functionality. You might have had a similar business model with fiat currencies (or any other kind) if they had been strongly linked with public and unique identifiers, but they are not. Bitcoin AFAIK uses globally unique wallet ids, so unbundling the trust function is possible.

    • Mar 25, 2014 at 9:12 pm

      TSting – no doubt I have misunderstood the idea. Fair enough.

  3. Zach Cope
    Mar 25, 2014 at 3:43 pm

    In a decentralised future individual reputation and trust itself will be a commodity. Maintaining a secure identity may be as important as securing one’s money. The ‘untrusted’ may become the new underclass.

    Note decentralised reputation requires decentralised identity – check out Invictus Innovations’ Keyhotee project as another related technological innovation in this field.

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