Why people may be turning to blockchain for financial trust

by Lumai Mubanga

After the 2007 to 2009 financial meltdown that left millions financially stranded and asset-stripped, people seemed to have gained a measure of trust to blockchain and cryptocurrencies that came on board almost immediately. Of course, trust is earned and with time, this though had to become more and more apparent with time. With almost a decade gone after that event, can we state with confidence that people have gained trust in cryptocurrencies? If so, what could be some of the reasons?

As far as the technology is not the answer to every challenge, the technology seems to have gained the trust of millions of customers worldwide. The previous article on this platform pointed to one fact that, by January 2020, more than 2000 types of cryptocurrencies were already on the market. That in itself could be one reason to demonstrate that trust in these products and related services has grown.

The following, therefore, could be some reasons why the people are turning to digital platforms for financial management trust than traditional banks and financial systems.

Easy and Integrated Product Lines

The growing populace of today is immersed in digital life. Long gone are the days when financial transactions were done separately from social life. Tech companies like Google, Tencent and amazon provide eCommerce services in addition to peer-to-peer lending and communication. As ICT becomes more integrated into our social lives, integrating financial services too and payment systems powered by modern smart phones seem to have fallen in at the right time. Initiatives by Facebook to integrate cryptocurrency or use existing ones within the platform has elated many users to respond with trust, bearing in mind that these are keepers of our digital identities. These large digital platforms have transcended many traditional financial institutions, not only in terms of customer engagement but also in terms of the trust. Surely, it is possible to trust whoever keeps your identity.

Machine Driven Trust

After witnessing the betrayal by some member of financial service providers during the financial crisis, it only became logical to change the objects of the trust. Could the machine-generated trust in blockchain replace that trust? To some extent yes. The reasons advanced could be that such systems use algorithms that confirm the authenticity of every transaction. There is no compromise or emotions attached. It comes out as a fair system. Additionally, each party’s identity is recorded and kept immutably, preserving an identity in its raw form that will not be tempered. This too promotes trust. Mischievous behaviour is prevented because the system makes it impossible to falsify the ledger. Lastly but not the least, accountability is enhanced because all actions on the public ledger can be audited independently by anyone on the network.

The above-outlined machine enhanced and machine-driven trust parameters have convinced many to trust machine algorithms than human agents. However, this does not mean that the trust is a hundred per cent. A future article will explore the other side of the coin, namely, why people may as well lose trust in the technology.