[kaesar14]

This was also my impression learning about it as I was starting to learn about global finance in high school. Even them it seemed ridiculous. I wonder how many more systems currently in place are based on such foolish promises and easily exploited foundations of trust.

[NoboruWataya]

Trust is central to the financial system, for better or worse. The whole thing is based on trust - whether it's trust in the person on the other end of the phone, trust in the big-name bank that person works for, or trust in that bank's regulator.

This seems stupid to some tech people, who try to disrupt it by creating trustless systems such as distributed ledgers. But trust keeps on creeping back into the system. There are crypto custodians, crypto brokers, crypto exchanges, all of whom you have to trust to some extent. There is crypto lending. I wouldn't be surprised if we eventually have the Bitcoin Interexchange Offered Rate decided by a handful of the biggest exchanges.

[FredPret]

Or we can call it the Hash-based Ordinary Daily Lending Rate

[robertlagrant]

Yes. You win HN today.

[kaesar14]

Why not Trust, but Verify? Why wasn't there a central set of individuals requiring documentation for self-reported rates and sanity-checking them? I agree that the chain eventually comes down to trust somewhere but it seems like central banking has really lacked the transparency and checks and balances a system needs to stay consistent and trustworthy externally.

[boringg]

Fiat currency is based on trust - so was the gold standard to a degree. Trust is an important part of society. We rip trust away in our societal institutions and we are left in a terrible existence.

If you boil everything down - trust a critical function. Your day is filled with trust of functioning. Without it you would live in pure chaos. I find these arguments facile.

[cardiffspaceman]

Pre-SoundScan record sales numbers?