Trust Is Risk: A Decentralized Financial Trust Platform

  • Orfeas Stefanos Thyfronitis LitosEmail author
  • Dionysis Zindros
Conference paper
Part of the Lecture Notes in Computer Science book series (LNCS, volume 10322)


Centralized reputation systems use stars and reviews and thus require algorithm secrecy to avoid manipulation. In autonomous open source decentralized systems this luxury is not available. We create a reputation network for decentralized marketplaces where the trust each user gives to the other users is quantifiable and expressed in monetary terms. We introduce a new model for bitcoin wallets in which user coins are split among trusted associates. Direct trust is defined using shared bitcoin accounts via bitcoin’s 1-of-2 multisig. Indirect trust is subsequently defined transitively. This enables formal game theoretic arguments pertaining to risk analysis. We prove that risk and maximum flows are equivalent in our model and that our system is Sybil-resilient. Our system allows for concrete financial decisions on the subjective monetary amount a pseudonymous party can be trusted with. Risk remains invariant under a direct trust redistribution operation followed by a purchase.


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Copyright information

© International Financial Cryptography Association 2017

Authors and Affiliations

  • Orfeas Stefanos Thyfronitis Litos
    • 1
    Email author
  • Dionysis Zindros
    • 2
  1. 1.National Technical University of AthensAthensGreece
  2. 2.National and Kapodistrian University of AthensAthensGreece

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