Learning Digital Identity

Chapter 7. Trust, Confidence, and Risk

Доверяй, но проверяй.¹

Russian proverb

Trust is at the heart of all relationships. Trust is the basis for society. We trust our spouse to lock the door when they leave the house. We trust our coworker to email a document for us. We trust the bank to not lose our money. We trust the airline pilot to fly us safely to our destination. Without trust in people and institutions, life is difficult to navigate.

In their excellent paper “Risk and Trust,”² Nickel and Vaesen define trust as the “disposition to willingly rely on another person or entity to perform actions that benefit or protect oneself or one’s interests in a given domain.” Unstated in this definition is that trust necessarily entails the trustor being vulnerable to the trustee. Trust entails an inherent risk.

By building relationships in the digital realm, we are creating a digital society, one where trust is necessary. Relationships imply a shared domain, context, and set of activities. We often rely on third parties to tell us things relevant to a relationship. Our vulnerability, and therefore our risk, depends on the degree of reliance we have on another party’s performance. Relationships can never be “no trust” because we create them expecting to rely on the other parties in them. Bitcoin and other cryptocurrencies can be described as low- or no-trust precisely because the point of the system is to reduce reliance on any relationship at all—not relying on the other party to the ...