Why Trust in Blockchain Matters for the Future of Business

Why Trust in Blockchain Matters for the Future of Business

Trust has always been the foundation of business. Buyers need to trust sellers, employees need to trust employers, and customers need to trust brands. Traditionally, this trust has been safeguarded by institutions such as banks, courts, and regulators. But blockchain technology is reshaping that equation: it replaces institutional trust with technological trust, shifting confidence from people and organizations to mathematics and cryptography.

Our research, based on 18 interviews with blockchain practitioners across industries, identifies three new ways blockchain enables trust in business exchanges: trust in actors, trust in actions, and trust in assets.

1. Trust in Actors: From Institutions to Technology

In traditional commerce, middlemen (e.g., banks, notaries, platforms) act as the guarantors of trust. Blockchain changes that by embedding trust in code. Through cryptography and consensus mechanisms, transactions are validated without the need for human guardians.

This shift reduces dependence on powerful intermediaries and redistributes influence across a wider set of actors. For businesses, the implication is clear: future trust will not always be earned through reputation or regulation but through the reliability of the underlying technology.

2. Trust in Actions: Transparency Instead of Asymmetry

In many industries, trust has been undermined by information asymmetry. Customers rarely know if a product’s origin story is accurate, if data has been altered, or if promises will be kept. Blockchain creates tamperproof, transparent audit trails where every step is verifiable in real time. For managers, this means that performance and compliance can be measured not by reports produced after the fact but by immutable records available instantly. Transparency becomes a built-in feature, not an afterthought.

3. Trust in Assets: Ownership That Is Proven, Not Promised

In traditional systems, ownership is often managed through paperwork, manual escrows, or centralized records. Blockchain replaces this with digital proofs of ownership and automated smart contracts that release assets only when conditions are met. This change doesn’t just secure transactions; it also democratizes data and digital assets. Instead of relying on third parties to store and release value, companies and consumers can interact directly with greater confidence.

A Case in Action: Insurance Without Middlemen

Imagine a travel insurance company that covers flight delays. Traditionally, a claim would require paperwork, waiting, and back-and-forth with the insurer. Using blockchain, a smart contract can be programmed to check flight data automatically. If the flight is delayed beyond a set threshold, the payout is triggered instantly, no claim required. For the traveler, this eliminates frustration. For the company, it reduces fraud and operating costs. The trust once placed in paperwork and human adjusters is now placed in transparent, self-executing code.

What Leaders Should Do

For executives navigating the blockchain era, three priorities stand out:

1. Assess where trust breaks down in your industry: Look for friction points where customers or partners hesitate, and explore if blockchain transparency could solve them.

2. Test smart contracts for efficiency: Start small with automating simple agreements, like warranties or service-level commitments, and expand as confidence grows.

3. Balance governance with decentralization: Technology can replace some guardians of trust, but not all. Success lies in combining blockchain’s strengths with thoughtful oversight.

   
   

The Bottom Line

Blockchain is not just a financial tool. It is a new institution of trust. By shifting reliance from people and organizations to mathematics and transparency, it changes how value is exchanged. Businesses that understand this shift can design more efficient, more credible, and ultimately more trusted relationships with customers and partners.

Original Articles: Tan, Teck Ming, and Saila Saraniemi. "Trust in blockchain-enabled exchanges: Future directions in blockchain marketing." Journal of the Academy of marketing Science 51, no. 4 (2023): 914-939. (Article Link)