alt Hacker NewsWhere would the trust come from? I mean the trust that people really do what they say they're going to do in the real world - like ship you the goods, do the work you paid for, don't immediately kick you out of the servers you paid to access etc. A shadow economy doesn't run itself, who's going to stick their neck out to even try to make it work?
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Crypto lets you decouple trust from ownership, that's one of its main selling points.
You can have a Visa-like network that supports chargebacks, but design it in a way that the dispute arbitrators cannot seize your money. If you report a transaction, they can either decide to release the money to the merchant or return it back to you, but the contract logic prevents them from doing anything else with that money. If both sides agree that the transaction has successfully taken place, it can be released automatically, despite the arbitrators' wishes.
This is something you can't do in trad fi, so we use laws and legal contracts as "hacks" to make it somewhat possible.
It's developed naturally through reputation systems, escrow, etc.
Where does the trust come from for transacting in dollars, or Spanish pieces of eight? I'm not saying the monero economy is likely but there's absolutely no reason why it couldn't theoretically happen
That's a completely separate issue. It's got nothing at all to do with the currency being used. USD has exactly the same problems, as does every other currency on earth.
Society's answer to that is violence. More specifically, the threat of violence. If people don't do what's expected of them, at some point people with guns will show up and the violence will commence, and it will continue until the desired order is restored.
Stuff like laws and courts are just extra steps towards that violence. No matter the context, the threat of violence looms eternal and that's what makes people behave reasonably.