Trust in electronic markets: The convergence of cryptographers and economists (originally published in August 1996)
AbstractThis paper is included in the First Monday Special Issue #3: Internet banking, e-money, and Internet gift economies, published in December 2005. Special Issue editor Mark A. Fox asked authors to submit additional comments regarding their articles. This paper was certainly a creature of its time. A decade ago the Internet bubble was receiving its first puffs of exaggerated exuberance. For me, this time was also informed by Barlow's A Declaration of the Independence of Cyberspace and more importantly, May's Crypto Anarchist Manifesto. The Internet and the anonymous cryptographic markets that would evolve upon it were immensely exciting. Or, at least their potential was exciting; the vision has yet to be. This text was based on my Master's thesis, which in addition to material found in First Monday also included a protocol for managing trust in information asymmetric relationships via a cryptographic security deposit. The protocol was accepted for presentation at a USENIX conference, but I, nor anyone else to my knowledge, have ever used such an instrument. I continue to buy things over the Internet with a simple credit card; thoughts of digital cash and micro payments are distant memories. However, the themes of this article are still relevant -- even if some of its inspirations are not. If one is interested in the question of trust, what it is, and how it relates to expected values or financial instruments, I hope the work is still of use. And trust is but one aspect of a theme that continues to be much discussed: social relationships. From digital reputation, to social protocols, social networks, and now social computing -- though this label too seems to be fading -- a prevalent question continues to be how do we replicate and augment social relations in this technologically mediated space? The expectation that this could be done with cryptographic systems may now, 10 years later, seem overly ambitious. Indeed in their 2000 book The Social Life of Information John Seely Brown and Paul Duguid cite this paper when they asked: "Can it really be useful, after all, to address people as information processors or to redefine complex human issues such as trust as 'simply information?'" Perhaps, in the next decade we will see widespread computerized reputation markets. Or, maybe they are already here, with things like Amazon's book ratings, rankings in the blogosphere, and collaborative filters. First Monday continues to provide analysis of this compelling space, but, in considering this article, it also reflects how we have changed in our ways of thinking about it. Relative to information security and electronic commerce, trust is a necessary component. Trust itself represents an evaluation of information, an analysis that requires decisions about the value of specific information in terms of several factors. Methodologies are being constructed to evaluate information more systematically, to generate decisions about increasingly complex and sophisticated relationships. In turn, these methodologies about information and trust will determine the growth of the Internet as a medium for commerce.
How to Cite
Reagle, J. M. J. (2005). Trust in electronic markets: The convergence of cryptographers and economists (originally published in August 1996). First Monday. https://doi.org/10.5210/fm.v0i0.1509
Authors submitting a paper to First Monday automatically agree to confer a limited license to First Monday if and when the manuscript is accepted for publication. This license allows First Monday to publish a manuscript in a given issue. Authors have a choice of: 1. Dedicating the article to the public domain. This allows anyone to make any use of the article at any time, including commercial use. A good way to do this is to use the Creative Commons Public Domain Dedication Web form; see http://creativecommons.org/license/publicdomain-2?lang=en. 2. Retaining some rights while allowing some use. For example, authors may decide to disallow commercial use without permission. Authors may also decide whether to allow users to make modifications (e.g. translations, adaptations) without permission. A good way to make these choices is to use a Creative Commons license. * Go to http://creativecommons.org/license/. * Choose and select a license. * What to do next — you can then e–mail the license html code to yourself. Do this, and then forward that e–mail to First Monday’s editors. Put your name in the subject line of the e–mail with your name and article title in the e–mail. Background information about Creative Commons licenses can be found at http://creativecommons.org/about/licenses/. 3. Retaining full rights, including translation and reproduction rights. Authors may use the statement: © Author 2016 All Rights Reserved. Authors may choose to use their own wording to reserve copyright. If you choose to retain full copyright, please add your copyright statement to the end of the article. Authors submitting a paper to First Monday do so in the understanding that Internet publishing is both an opportunity and challenge. In this environment, authors and publishers do not always have the means to protect against unauthorized copying or editing of copyright–protected works.