Blockchain as a Confidence Machine: The Problem of Trusts & Challenges of Governance

Technology in Society, Vol. 62, August 2020, 101284, DOI 10.1016/j.techsoc.2020.101284

14 Pages Posted: 14 Sep 2020

See all articles by Primavera De Filippi

Primavera De Filippi

Université Paris II - Panthéon-Assas

Morshed Mannan

Leiden University, Department of Company Law

Wessel Reijers

European University Institute

Date Written: June 19, 2020

Abstract

Blockchain technology was created as a response to the trust crisis that swept the world in the wake of the 2008 financial crisis. Bitcoin and other blockchain-based systems were presented as a “trustless” alternative to existing financial institutions and even governments. Yet, while the trustless nature of blockchain technology has been heavily questioned, little research has been done as to what blockchain technologies actually bring to the table in place of trust. This article draws from the extensive academic discussion on the concepts of “trust” and “confidence” to argue that blockchain technology is not a ‘trustless technology’ but rather a ‘confidence machine’. First, the article provides a review of the multifaceted conceptualisations of trust and confidence, and the relationship between these two concepts. Second, the claim is made that blockchain technology relies on cryptographic rules, mathematics, and game-theoretical incentives in order to increase confidence in the operations of a computational system. Yet, such an increase in confidence ultimately relies on the proper operation and governance of the underlying blockchain-based network, which requires trusting a variety of actors. Third, the article turns to legal, constitutional and polycentric governance theory to explore the governance challenges of blockchain-based systems, in light of the tension between procedural confidence and trust.

Keywords: Trust, Confidence, Blockchain, Governance, Rule of Law, Polycentricity

Suggested Citation

De Filippi, Primavera and Mannan, Morshed and Reijers, Wessel, Blockchain as a Confidence Machine: The Problem of Trusts & Challenges of Governance (June 19, 2020). Technology in Society, Vol. 62, August 2020, 101284, DOI 10.1016/j.techsoc.2020.101284, Available at SSRN: https://ssrn.com/abstract=3665447

Primavera De Filippi

Université Paris II - Panthéon-Assas ( email )

12 place du Pantheon
Paris cedex 06, 75231
France

Morshed Mannan (Contact Author)

Leiden University, Department of Company Law ( email )

Wessel Reijers

European University Institute ( email )

Villa Schifanoia
133 via Bocaccio
Firenze (Florence), Tuscany 50014
Italy

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