Let’s face it. The only two things we really need to know about people – and for that matter, companies – are whether we can trust them and whether they are competent.
The first one we’ve become pretty good at. Human evolution has equipped us to figure out if someone is trustworthy, usually within the first few seconds of meeting. It’s not perfect but over the last couple hundred thousand years our ancestors became pretty good at these instincts, whether it be the early mammoth-spearer or the modern attorney. This has given rise to the theory of “Dunbar’s number,” the sociological argument that an individual can only know and trust 150 people, on average.
This number is a function of the workings of the human brain and the evolution of the species, which for most of our history has lived in small groups. Once we started domesticating plants and animals, however, our communities soon expanded past Dunbar’s number. This is why we put in place new social hierarchies (think religion, politics, and the law) to help us figure out who we can trust and what we can do. Gruesome as it sounds, historically the penalty for not following these general guidelines for society has been death. Don’t you think there has to be a better way to do this?
Social hierarchies are important but nothing beats trust and competence. And trust and competence have historically worked the best and brought the best fruits to humankind when they have occurred in a decentralized environment. When we lived in small hunter-gatherer groups, decentralization of trust was the coin of the realm, sharing came naturally, and a bountiful harvest by one benefited all without it becoming a zero-sum game.
So now we are in a society that consists of way more than 150 people. Your real or virtual rolodex assuredly has more than 150 names and your company probably has more than 150 contracts with other companies. Given the limitations imposed by Dunbar’s number, how do we solve complex equations for trust and competence today? The answer goes back to decentralization.
That is, rather than centralized trust tools and competency markers—like government-issued social security and employer identification numbers, or Facebook-owned profiles and messages—it’s time to look at putting control of trust and competence back in the hands of the individuals who use them.
Decentralization isn’t new.
We have seen it when the printing press, media and the Internet moved information into the hands of rank-and-file people, not just the powerful central churches and states. Social media has this potential as well, although tools like Facebook have raised controversy lately with how it manages everyone’s virtual vocal cords.
Decentralization is occurring with the proliferation of encrypted messaging technology and social media. The fight over iPhone encryption shows why the federal government thinks this is a threat to its centralizing capabilities. A deeper example is the proliferation of fintech, which relies on freely distributed code to assign value to anything that can be traded upon. The creators of bitcoin are the most obvious decentralizers, but even the new fintechs that sell personal loans are moving control out of the big banks and toward the end customer.
You need to jump on these decentralization bandwagons about as much as you need another hole in the head. The pace of creation, adoption, and consolidation in the social media and fintech businesses is so rapid that in a few years, only a few players will be left standing, sort of like what Microsoft accomplished with its Office suite of productivity tools.
So while everyone else is busy fighting that foregone fight, you might do well to expend your energies on a decentralization that few are even thinking about: What will the world be like when those early markers of trust and competence start working well again … but for more than just your 150 closest friends?
Picture a non-governmental, globally accepted system for establishing and sharing every individual’s personal trustworthiness and competence. It will be blockchain-based and biometric, with public and private key architecture, using your fingerprints, retinal scans, or DNA to keep identity and information safe. It will be voluntary, in much the same way that modern social media is voluntary. Unlike current social media, the rules of this trust engine will be transparent and widely understood. And it will be easy to build across the globe, soon enough, with the expansion of mesh technology. This new system will be as competent as the people whose reputations protects. It will be more competent than our governments. And it will eventually spread to corporate identities and reputations.