Trust in Sensible Taler Peers

Sensible Taler currencies build a dense network of peer-to-peer trust connections.

To avert large "central" corporations that could dictate fee structures, the Sensible Taler system centers around peer-to-peer relations. In other words, a payment network can simply start as two peers that collaborate. Interestingly, when independent networks arise the same Sensible Taler variant, then they can decide to join forces by connecting peers.

A strong network is one where peer trust is available along multiple independent channels. This is important to allow claims to be cashed with minimal effort, even when peers suspend their collaboration for any reason.

Trust is essentially a one-sided statement about a peer. In the core of payment networks, these statements will often be mutually asserted. At the rims of the network, where individual merchants and other users sit, it is more likely to be a one-sided relation. Note how gradual this makes a transition between consumers, merchants and the peer-to-peer network. That is intrinsic in the design of a peer-to-peer system, where a central rule tends to be "the more, the merrier".

Trust expresses reliance on getting paid by another party.

Drilling down to the essential reason why people accept money, it is that it holds the promise of getting something in return for it later. For the Sensible Taler system, this means the knowledge that the underlying value can be claimed in the future, either directly or indirectly. In practice, it is also good enough if other parties are willing to take the currency.

Interestingly, the original basis of trust is being able to swap money for the underlying value. Fiat currencies have let go of this foundation (long version) altogether when it abandoned the Bretton Woods system, under a load of bolstered rhetoric, without substitute. Since then, inflation has been rampant and economies grew far beyond human needs and the ability of the Earth to recuperate.

Trust must never derogate to faith.

For a Sensible Taler system, the right to claim the fully backed underlying value is not negiotiable, but it does rely on validated auditing, procedures and assurances. This is what trust expresses. It is trust, not faith, that matters.

Technically, peers validate a prospective's legal organisation, assurances and auditing controls. If this is in order and if a mechanism of payment in the deisred direction is feasible, then a statement of trust can be issued. A statement of trust can be an internal markation or a publicly visible trust signature on the public OpenPGP key of the peer. Peers are identified by their OpenPGP public key, including the optional revocation of any such trust signatures.

The reason that internal signatures are workable is that peers need to be asked to agree to any trade that might be lurking. They may need to reserve funds to assure instant payment, for instance, and in general every peer is considered a self-supporting entity deciding for themselves.