Relational Contracts & Trust Networks via Nostr
Though bitcoin operates without a need for trust, real-world economic activities often still require it. The article explores how Relational Contract theory can establish and quantify trust through Nostr, highlighting that economic transactions can maintain stability without third-party escrow or the threat of violence. The concept is that trust is built through repeated successful exchanges where both parties recognize mutual benefits, leading to stable trading relationships.
- The challenges of relational contracts, such as bootstrapping trust from zero and the costliness of destroying relationships, can be mitigated through strategic interactions and cost signalling.
- The author proposes a sybil-resistant proof-of-trade-history that leverages a voluntary transaction rake to build reputational data, which could shift the preference towards honest cooperation rather than defection.
- Potential for Nostr lies in markets dominated by a few companies that inhibit free interaction, where peer-to-peer transactions via Nostr can lead to substantial market improvements and drive bitcoin adoption as the default currency.
- The author expresses optimism for Nostr's potential to reshape economic systems and ends the article with a personal note on starting an aerospace & defense startup, inviting interested readers to get in touch.
https://heaviside.substack.com/p/nostrato-how-relational-contracts
Bitcoin /
npub1dw…ds9g9
2023-12-09 02:09:18
Author Public Key
npub1dwegu7taqadap2pzw6dszulc6r7gwmldawjpdrersuykxxlyzfeskds9g9Published at
2023-12-09 02:09:18Event JSON
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"content": "Relational Contracts \u0026 Trust Networks via Nostr\n\nThough bitcoin operates without a need for trust, real-world economic activities often still require it. The article explores how Relational Contract theory can establish and quantify trust through Nostr, highlighting that economic transactions can maintain stability without third-party escrow or the threat of violence. The concept is that trust is built through repeated successful exchanges where both parties recognize mutual benefits, leading to stable trading relationships.\n\n - The challenges of relational contracts, such as bootstrapping trust from zero and the costliness of destroying relationships, can be mitigated through strategic interactions and cost signalling.\n \n - The author proposes a sybil-resistant proof-of-trade-history that leverages a voluntary transaction rake to build reputational data, which could shift the preference towards honest cooperation rather than defection.\n\n - Potential for Nostr lies in markets dominated by a few companies that inhibit free interaction, where peer-to-peer transactions via Nostr can lead to substantial market improvements and drive bitcoin adoption as the default currency.\n \n - The author expresses optimism for Nostr's potential to reshape economic systems and ends the article with a personal note on starting an aerospace \u0026 defense startup, inviting interested readers to get in touch.\n\nhttps://heaviside.substack.com/p/nostrato-how-relational-contracts",
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