Blockchain Technology: Trust Is The Basis

Bitcoin, Ethereum or the planned Libra payment system from Facebook - all of them and many other crypto currencies use the so-called blockchain technology. But while these alternative currencies have long since begun to compete with the established cash or deposit money, very few people know exactly what is behind the countless ones and zeros. Fabiane Völter is one of the people who knows a lot about the number chains behind them. She works as a research assistant at the Competence Center Financial and Information Management (FIM) and previously studied International Business Administration at WHU - Otto Beisheim School of Management. As part of her master's thesis she intensively dealt with the role of trust in new financial market instruments and returned to Vallendar for a guest lecture at the Chair of Corporate Finance.

Under the title "Designing Blockchain for the Value of Trust", the doctoral candidate explained to students the new opportunities that arise from trading with the help of blockchain technology. Experts agree that crypto-currencies as a means of payment have so far been practically impossible to manipulate because they are traded peripherally. This ensures that there no longer needs to be a relationship of trust between two players, but that trust alone in the technology is now sufficient. In this way, new business areas are opened up. For example, crypto-currency can also be used to trade with people with whom one would otherwise be unlikely to enter into a business relationship. The financial instrument itself provides the necessary security for the solvency of the counterparty.

For this, however, trust in the respective crypto-currency is necessary. Without trust in the equivalent value of traditional money, it would not function as a medium of exchange either. Thus Völter showed in her lecture that many, which began to pay for example with Bitcoin, did this only because friends had already done it before. Through this network effect, crypto-currencies are gaining more and more influence as a means of payment.

The computer and the technology themselves become social actors in business relationships that involve crypto-currency. In order to better understand the decision-making processes in humans in this process, the University of Zurich has dedicated a separate research field to "neuroeconomics". Similar to Völter's work, the role of trust and the impulses that influence human decisions in transactions are also being investigated there.