As a founder for the past decade, I have always been fascinated by the concept of trust, its definition in the product ecosystem, and the role it plays in shaping the way we do business and build platforms. In today's digital world, trust is becoming increasingly important as we rely more and more on online services and platforms to connect us with others and help us make decisions. However, traditional centralized trust models are often flawed, with power and control concentrated in the hands of a few. This is where decentralized trust comes in, offering a new way for startups and businesses to build trust and foster stronger connections with their customers and users. These decentralized platforms are needed because they offer several benefits over traditional, centralized platforms by offering users a more secure, trustworthy, and community-driven source of information, which is why it is needed in today's landscape.
Decentralized Trust: Decentralization eliminates the need for a central authority or middleman, making the platform more transparent and trustworthy. By relying on blockchain technology, recommendations are stored on a public ledger that is immutable and resistant to tampering or censorship, providing users with a more secure and trustworthy source of information.
Decentralized trust refers to the way that trust is established and maintained in a decentralized system, without relying on a central authority or middleman. In a decentralized system, trust is achieved through the consensus of a network of peers, who collectively validate and verify transactions and other actions on the network.
In traditional centralized systems, trust is established by a central authority, such as a bank, a government, or a corporation. This central authority serves as the intermediary between parties, verifying transactions and other actions and ensuring that the system remains secure and reliable. However, this centralization also creates a single point of failure, making the system vulnerable to attack, fraud, or other forms of corruption.
In contrast, decentralized systems leverage blockchain technology to create a network of peers who collectively validate and verify transactions and other actions, without relying on a central authority. In a decentralized system, trust is established through consensus, as the network of peers collectively validate and verify transactions and other actions, creating a secure and transparent system that is resistant to attack, fraud, and corruption.
One of the key benefits of decentralized trust is that it eliminates the need for intermediaries, making the system more secure, transparent, and efficient. Decentralized trust represents a new and innovative way of establishing trust in digital systems, providing a secure and transparent platform for transactions and other actions that is resistant to attack, fraud, and corruption, since the network of peers acts as a collective check and balance, reducing the potential for any single party to abuse the system for their own gain.
The Michelin Guide is an example of a centralized system of trust that can be difficult for new entrants to penetrate. The guide is a prestigious restaurant guidebook published by the French tire company Michelin. Restaurants are rated and awarded Michelin stars based on their quality and cuisine, and the guidebook is widely considered to be the most authoritative guide to fine dining.
However, the Michelin Guide operates as a centralized system of trust, as the ratings and awards are determined by a small group of anonymous Michelin inspectors who visit the restaurants and make their assessments. This centralization creates a barrier to entry for new entrants, as the inspectors' assessments can be difficult to influence and new restaurants may have to wait for years before being recognized for their quality.
This centralized system of trust can also create a perception of bias, as the Michelin inspectors are not required to disclose their identities or their criteria for awarding stars, leaving some to question the impartiality of their assessments.
In this sense, the Michelin Guide serves as an example of how centralized systems of trust can create barriers to entry for new entrants, making it difficult for new restaurants and establishments to achieve the recognition and status that they deserve, despite offering high-quality cuisine.
A decentralized recommendations engine could have a significant impact on the growth and success of micro-influencers and content creators. By leveraging the power of blockchain technology and decentralized trust, such an engine could provide a more democratic and transparent platform for these individuals to share their content and recommendations with a wider audience.
As I described above, these decentralized engines would eliminate the need for intermediaries, such as traditional influencer marketing platforms, which can take a significant cut of influencers' earnings. By bypassing these intermediaries, micro-influencers and content creators would have more control over their content and be able to monetize their recommendations more effectively.
Another advantage of a decentralized recommendations engine is that it would create (and has already created) a more level playing field for micro-influencers and content creators, regardless of their size or following (important for those that have great networks but feel that the effort to be seen will only be prevalent once they achieve a ‘critical mass’ of followers). In a decentralized system, recommendations are based on the consensus of the network, rather than on the opinions of a small group of individuals, allowing new and emerging influencers to reach a wider audience and grow their following more quickly.
A decentralized recommendations engine would also provide a more transparent and trustworthy platform for users to receive recommendations, as the network of peers would collectively validate and verify the recommendations, reducing the risk of fraud or misinformation. It also has the potential to provide a more democratic and transparent platform for micro-influencers and content creators to share their content and recommendations with a wider audience, helping to boost their growth and success.
Powerful platforms like Wayo (wayoworld.com) and Plural.com are using these engines to spearhead viral user-to-user growth. Their decentralized recommendations engines are two great examples of how powerful it is to allow users to 'connect' with each other based on mutual contacts saved in their phonebook. This type of system operates on a decentralized network, meaning that it is not controlled by a central authority, but instead relies on a network of peers to validate and verify the recommendations. I’m much more likely to buy a pair of jeans that my friend’s friend tells me about than some person at the mall who might be compensated or incentivized to sell me jeans regardless of whether I would actually like them.
For example, let's say that person A knows person B, and person B knows person C. With this type of engine, person A and person B can connect through their mutual contact, and the system would then be able to share recommendations of all three people with each other. This means that person A would be able to receive/view/share/consume recommendations from person C, even though they do not have a direct connection.
These decentralized engines are not just all about trust though - there are other key principles & benefits, that we will start to see platforms trend towards over the next 12-36 months, such as:
User Control: Decentralized platforms give users more control over their data and personal information. On a centralized platform, user data is typically controlled by the company operating the platform, which can use it for various purposes, such as targeted advertising or selling to third parties. On a decentralized platform, users have full control over their data and can choose to share it with others or keep it private, as they see fit.
Community-Driven: Decentralized platforms are community-driven, allowing users to contribute to and shape the platform in a way that aligns with their needs and interests. This creates a platform that is more organic and responsive to user needs, as opposed to a platform that is controlled by a single company or group.
Reduces Bias: Decentralization reduces the potential for bias in recommendations, as they are not influenced by a central authority or third-party service. This provides users with more accurate and unbiased information, helping them make informed decisions about where to go and what to do.
Incentivizes Engagement: Decentralized platforms can use tokens and other incentives to incentivize user engagement and contributions, creating a more dynamic and participatory experience for users.