Why trust is bad for transactions

We are taught that trust needs to be at the heart of personal and business relationships but when it comes to transactions, trust-less is best.

Imagine you want to buy my rare autograph photo of Elvis Presley and we agree a fee of ï¿¡1,000. You live in LA and I live in London and we don't know each-other.

I suggest that you send me ï¿¡500 and when I've received it, I'll send the photo and when you receive it, you can pay the balance.

In order for this transaction to be conducted as planned, you must trust me not to take your ï¿¡500 and run and I must trust you to pay the balance after the photo has arrived. And of course we have a fluctuating exchange rate to deal with.

It's worse on Amazon and eBay when you have to pay up front before you receive the item you bought. Have you ever put money in a vending machine and nothing came out?

Now imagine we meet face-to-face and in front of us are two boxes, side-by-side with locked doors at both ends. I open the box on my left with my key and place the Elvis photo inside. I then lock the box. You place your ï¿¡1,000 in the box to your left and lock your box.

The boxes know that they now contain the promised items of value so they open the other doors simultaneously. I reach in and pick up the ï¿¡1,000 as you reach in and pick up the Elvis photo.

Now, at no stage of this transaction was either party in possession of both items of value or any part of them. The system was designed to be trust-less.

#Blockchain technology facilitates this kind of trust-less transaction by recording immutable details about transactions.

If I exchange #Bitcoin for #Ethereum, the details are recorded on the blockchain in multiple locations in the distributed ledger. Trust is built into the system to make it trust-less.

It's ironic then that the vast majority of us still distrust what is essentially the most trustworthy technology.