The Most Important Scarce Resource is Legitimacy

Vitalik Buterin, the co-founder of Ethereum, wrote that “Legitimacy is a pattern of higher-order acceptance.” When enough people within the system question the system’s fairness it threatens the system's ability to continue to function, and you get a legitimacy crisis.

Centralized trust creates negative externalities even when those at the center remain trustworthy. As the market expands, a purely person-to-person approach breaks down and would necessitate the presence of intermediaries. Intermediation, on the other hand, serves many roles, but also imposes costs, especially when the intermediary is a private com... See more