Blockchain and trust: Refuting some widely-held misconceptions

In this paper, we discuss a fundamental question: What is the nature of trust in the blockchain context? Thereby, we critically examine widely-held assumptions on blockchain and trust. In particular, we examine the assumption that the blockchain is trust-free. Based on a comprehensive review of the Information Systems (IS) literature on blockchain, we identified and analyzed all text passages related to trust (N = 452 text passages, distributed across 61 papers out of a total of 85 blockchain papers). This analysis revealed that “Trust in algorithms,” “Technological mechanisms and trust,” and “Substitution of intermediaries and trust” constitute the top-3 research themes in the current IS blockchain literature. We discuss these themes based on a simple conceptual trust framework in the Bitcoin context, and thereby reveal the misconceptions that participation in a blockchain ecosystem (here Bitcoin) only implies trust in algorithms and consensus mechanisms, and that the blockchain makes intermediaries dispensable and thereby trust in them irrelevant. Rather, we argue that trust only shifts from specific market players in the blockchain ecosystem to others. Against this background, we conclude that trust issues have not changed fundamentally. Rather, traditional determinants of trustworthiness (i.e., ability, benevolence, integrity), along with known mechanisms to establish trust in online settings (e.g., third-party institutional mechanisms), will remain critical in blockchain settings. We also discuss limitations of the study and outline potential avenues for future examination.