BLOCKCHAIN TECHNOLOGY: A TRUST OR CONTROL MACHINE? Theory and Experimental Evidence

Abstract

After the introduction of Bitcoin in 2008, there has been a proliferation of interest in digital technology called Blockchain. It has been argued that Blockchain can sustain any transaction of value, be it monetary or information, in a manner that is secure and completely independent of interpersonal trust. This same technology is perceived to be so secure and reliable that The Economist named it a “trust machine”. Yet, due to its relative novelty, there is still little theoretical and empirical research on how this technology is expected to provide such trust-free transactions. Moreover, there seems to be an unaccounted disagreement about whether this technology is capable of creating interpersonal trust or it is just managing human relationships by shifting the trust that people have in each other towards trust in the technology itself. Therefore, the aim of this paper is to provide an in depth theoretical understanding of the relationship between trust and Blockchain technology and by doing so, answer the question of whether Blockchain is a trust-free or trust-building technology. Furthermore, in order to test the proposed claim, I carry out an online experiment with US participants recruited from Amazon Mechanical Turk The results indicate, contrary to my expectations, that Blockchain-based technology would not omit trusting and trustworthy behavior from human relationship. On the contrary, the behavior of the participants in the Blockchain treatment exhibited more trusting and trustworthy behavior, indicating support for the claim that this technology might indeed be understood as a “trust machine”.