Trustless architecture and the V-form organization

Blockchain (distributed ledger technology) is an institutional technology that allows trust to be manufactured instead of being earned. Trust is an important component of business and trade and has previously been subsumed into information costs. It is only now that the importance of trust is being fully appreciated. Arun Sundarajaran has suggested that the creation of new forms of trust has driven the expansion economic activity throughout history. In this chapter we argue that the industrialization of trust is going, again, to drive a massive expansion in economic activity through the emergence of new organizational forms that will deliver high-powered market incentives deep into what would appear to be hierarchical organizations. We are labelling these (as yet speculative) organizations forms the "V-form" organization. In this chapter we discuss the importance of trust, the evolution of trust, and the industrialization of trust. We argue that current organizational forms have exhausted the levels of trust that have previously sustained them. Blockchain technology offers a new industrialized form of trust that can drive further economic activity.