The economic basis of trust in blockchain

The level of trust in the economy remains one of the parameters determining the well-being of society. Traditional elements were formed primarily through interpersonal relationships and institutional mechanisms. The development of digital technologies reduces the possibilities for opportunistic behavior of intermediaries and reduces the vulnerability of the trustor. In this context, blockchain acts as a catalyst for the transformation of trust in the economy. This article proposes a structured definition of the concept of «trust in blockchain» and analyzes the conditions for its implementation in the digital environment particular attention is paid to the role of blockchain as a technical and institutional infrastructure — ​the key technical properties of blockchain are highlighted. It is shown how they relate to the mechanisms of trust reproduction and the economic basis of these mechanisms, including the network security model. The second section examines two currently leading blockchains — ​Bitcoin and Ethereum: historical data on «security budget» is presented, broken down by emission and fee components, as well as data on the volume of locked funds by asset class. Based on this data, an assessment of the sustainability of the economic model is made. As a result, trust in blockchain can be viewed as a measurable economic construct. The blockchain security model proven its viability through the inflow of real assets, but its relative inefficiency limits scalability. Under these conditions, the key innovation is the redistribution of risks within the system, which allows trust to be built into its architecture. The emission of a native cryptocurrency forms the economic framework of the model, but at the same time, while a trend toward the growth of more sustainable user (fee) cash flows is observed.