# kaal:claim:3405401-016

**Claim.** Trust between counterparties in decentralized systems can only limitedly be assured by smart contracts, because the contract cannot verify the underlying qualities or future conduct of the parties.

**Type.** failure  **Support.** argued

**Holds when.**

- decentralized systems with anonymous counterparties

**Source quote.**

> Trust between counterparties in decentralized systems can only limitedly be assured by smart contracts.

**From.** Wulf A. Kaal, *Decentralized Commerce – A Primer on Why Decentralized Reputation Verification Systems Are Needed* (2019), V. Trust Problem, page 6

**Cite as.** Wulf A. Kaal, Decentralized Commerce – A Primer on Why Decentralized Reputation Verification Systems Are Needed (2019). SSRN: https://ssrn.com/abstract=3405401

**Verify.** sha256 of source PDF `bc2d6f0ddc0852fb4085c4543c7c1dec19aaf8745eb67e3acc637e552bd7fb7d` at https://raw.githubusercontent.com/wulfkaal/Academic-Papers/main/papers/pdf/Kaal%20-%202019%20-%20Decentralized%20Commerce%20%E2%80%93%20A%20Primer%20on%20Why%20Decentralized%20Reputation%20Verification%20Systems%20Are%20Needed.pdf

**Failure mode.** limited-trust-assurance  (family: information-asymmetry)

**Topics.** reputation, smart-contracts, risk-and-incentives, decentralization

**Keywords.** trust, smart-contracts, counterparty-risk, decentralization

**Related claims.**

- supersedes: https://wulfkaal.github.io/claims/3227967-027

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