The Crypto World Doesn't Lack Tokens, It Lacks Trust: A New Proposal for an Ethereum 'Human Commitment Market'

Author: hitesh.eth

Translated by: TechFlow

TechFlow Summary: When market cycles are dominated for prolonged periods by leverage and token price swings, everyday participants often feel insecure and revert to compromise, accepting restricted access and centralized custody. Independent researcher hitesh.eth uses this article to explore: in an era where institutions absorb the technology, how should Ethereum guard its original commitment to free collaboration?

The article traces back to the core theories of Timothy C. May, Eric Hughes, David Chaum, Wei Dai, and Nobel laureate Elinor Ostrom, emphasizing that a liquid market does not equate to a sound social order. It outlines a prototype for "Human Commitment Markets" that integrates custodial contracts, confidential credentials, and limited reputation systems.

First, clear your mind of price pumps and dumps for just a few minutes.

Imagine the crypto world as a city we rebuild after every earthquake. With each cycle, we invite more residents, construct taller skyscrapers, and celebrate the expansion of our skyline.

Then, certain structures collapse. Leverage gets liquidated, and promises evaporate. It's only then that people realize the very person who sold them the "vision of the future" had already unloaded their own bags long ago.

A few buildings survive, which we call "resilience." But we rarely stop to ask: was this city originally designed to protect the everyday people living inside it?

What I worry about runs deeper than the next market crash. If an open financial system repeatedly makes everyday participants feel insecure, they will turn to entities that promise protection. In exchange for predictability, they might even willingly accept surveillance, access restrictions, and asset custody.

This is how a movement built around freedom slowly loses its way, even though the underlying technology itself has never disappeared.

The technology remains intact, traditional institutions will continue to absorb and adopt it, but the original intent behind that technology becomes merely optional.

I used to summarize this as the divide between "crypto anarchism" and "crypto authoritarianism." While this serves as a useful warning, the distinction needs to be defined more precisely.

Regulated products are not inherently authoritarian, nor do permissionless tokens inherently represent liberation. A founder holding unrestricted admin keys can exercise immense control within a project that proudly proclaims "decentralization."

The truly pragmatic questions are: who can change the rules, who can seize assets, who is secretly monitoring participants, who can restrict access, and who can prevent others from leaving?

These inquiries pull us back to the original meaning of cryptocurrency before it devolved into a mere pile of token code. Within this discursive context, Crypto begins with Cryptography.

From the Cypherpunk Manifesto Back to Real Trust Problems

In his 1988 *The Crypto Anarchist Manifesto*, Timothy C. May envisioned a world where people could communicate, trade, and sign electronic contracts without exposing their legal identities. He foresaw the birth of information markets and profound shifts in the relationship between individuals and institutions.

But one sentence deserves closer attention: "Reputation will be at the center."

Timothy C. May also acknowledged that anonymous systems could enable serious abuse. He offered no ready-made mechanism for eliminating bad actors, nor did he claim that an Ethereum-style reputation system could solve everything.

The personal conclusion I draw from his warning is: when everyday participants cannot distinguish between "trustworthy commitments" and "well-packaged extractive schemes," freedom itself becomes unsustainable.

We have built powerful machines for creating markets. Yet, when it comes to deciding "who should be trusted" within those markets, we still need better mechanisms.

Eric Hughes approaches this problem through the lens of privacy. In his 1993 *A Cypherpunk's Manifesto*, he defines privacy as "the power to selectively reveal oneself to the world."

This demands more than simply "hiding a name behind a wallet address." It means having the autonomy to decide what necessary information to provide in specific interaction scenarios, while keeping everything else properly confidential.

A designer should be able to prove they have delivered high-quality work without disclosing their savings balance. A buyer should be able to prove that payment has been locked in escrow without exposing every single item they have previously purchased.

A community should be able to verify eligibility requirements without creating permanent personal profiles for every member.

David Chaum's research laid earlier groundwork for this direction. In his 1985 work on *Security Without Identification*, he warned that computerized transaction records could become tools for mass surveillance.

His research exploration into "credential systems across unlinked pseudonyms" demonstrated that verifying qualifications does not require a unified identity exposed everywhere.

This matters because an early intuition of mine needs correction: a global interoperable identity that connects all records sounds highly efficient, but a universally visible unified identity could just as easily become the surveillance infrastructure we desperately want to escape.

What we need are interoperable proof credentials, with control over information disclosure firmly held by the credential holder themselves.

Wei Dai brought another crucial piece of the puzzle. In his 1998 b-money proposal, he explicitly linked collaboration among pseudonymous groups with currency and contract execution, describing a mechanism where participants stake collateral and designate arbitrators before a contract takes effect.

This was an early attempt to give anonymous collaboration real economic constraints. Of course, it was built on numerous assumptions at the time and fell short of being a complete social solution that fully resolved these challenges.

Connecting these intellectual threads points toward a more vibrant interpretation of crypto anarchism: people ought to be able to voluntarily establish collaborative relationships, protect their privacy, exchange value, and enforce bounded contracts without handing over surplus power to intermediaries.

Distinguishing "Good Crypto Anarchism" from Predatory Speculation

A liquid market where everything is tradable is merely one of many possible outcomes. It is not a complete social order.

A tomato-representing token does not grow tomatoes; a reputation market does not necessarily cultivate trustworthy people; ever-rising token prices do not prove that a community is creating anything beneficial.

If the only way for participants to profit is by selling tokens to newcomers, the entire system becomes permanently dependent on a constant influx of fresh capital.

A healthier economy would also compensate people for repairing equipment, teaching skills, writing software, creating music, providing storage, and solving actual problems.

This is precisely the line I want to draw between "good crypto anarchism" and "bad crypto anarchism."

Good crypto anarchism expands our capacity for free collaboration; bad crypto anarchism allows a few to exploit this freedom while offloading the costs and consequences onto everyone else.

The institutional foundation I propose to build rests on three pillars: commitment, collaboration, and reputation, with privacy protection woven continuously throughout all three.

Commitment makes agreements tangible and measurable; collaboration allows people to pool resources under mutually understood rules; and reputation ensures past relevant experience informs future decisions.

All three are indispensable. Without impartial arbitration, deposit collateral punishes the innocent; collaboration lacking effective exit paths descends into control; and a reputation system without privacy protection risks sliding into a social credit surveillance regime.

Polycentric Governance: We Don't Need a Single Global Score

Beyond the cypherpunk tradition, there is another thinker central to this discussion: Elinor Ostrom. Her research on polycentric governance challenges the inherent assumption that all collective problems can only be solved by relying on a central state apparatus or a singular market mechanism.

Her research tradition examines systems operating with multiple decision-making centers running in parallel, including grassroots communities that autonomously formulate rules, monitor each other, and continuously revise their charters.

To clarify, Elinor Ostrom was not proposing to build Ethereum or endorse crypto anarchism back then; quoting her here applies her governance frameworks to our current context.

The practical implication for the crypto industry is straightforward: we do not need an all-encompassing global unified community, a universal reputation scoring system, or a grand manifesto applicable to everyone.

We can build small communities around specific shared interests, such as equipment repair guilds, music creation cooperatives, research groups, study circles, or software development teams.

Each small community can define what constitutes "good performance" within its own context, while allowing members to carry relevant performance credentials over for reuse in other communities.

An excellent musician does not inherently qualify as a financial custodian; a flashy coding portfolio is hardly enough to arbitrate every dispute within a community. Reputation systems should maintain these domain boundaries.

This approach also reshapes our understanding of incentive mechanisms. Communities can direct subsidies precisely toward verified contributions within their respective domains, without forcibly locking earned earnings within an internal ecosystem.

If an economy must rely on preventing participants from leaving to barely sustain itself, its foundational design undoubtedly harbors deeper flaws.

Paying rent with money you've earned yourself is absolutely not a betrayal of crypto anarchism. True freedom must include the right to exit.

Human Commitment Markets: How to Implement Them on Ethereum

So, how exactly do we build these concepts on Ethereum?

I start with Human Commitment Markets: in these communities, people reach agreements on valuable labor upfront, lock in remuneration funds, define completion verification evidence, and preset consequences for breach of contract.

The starting point here is the services people actually want. Tokens should follow the fulfillment obligations they represent, rather than precede them.

Imagine a small repair community: customers need maintenance services, experienced technicians need orders to fulfill, novice apprentices want to learn the craft, some members evaluate disputed orders, and the public treasury funds skill training or equipment purchases.

In such a community, the same individual can act as a customer in one agreement, a service provider in another, and a contributor to community resources in a third.

Even if ownership or dividend rights arrangements are introduced later, they must be clearly defined separately; merely holding a certain community token does not grant recourse against every member's business within the community.

Ethereum can provide useful technical components, but it cannot directly hand-build the entire institutional arrangement.

All standards mentioned below were in Final status as of November 10, 2026, when checked against their official pages. Note that this status only indicates that the specification itself is finalized and does not equate to the security of any specific smart contract implementation.

Figure: Classification table of important Ethereum ERC standards covering leasing, soulbound credentials, composability, permissions, and AI identity issues.

Distinguishing between token standards and underlying support infrastructure is crucial. For example, ERC-4337 addresses account abstraction, while ERC-5564 focuses on stealth addresses; neither serves as a tool to conjure new community currencies out of thin air.

For service credits or quota credentials, a multi-token standard can initially be adopted. ERC-1155 supports multi-category tokens and batch operations, while ERC-6909 offers a more streamlined multi-token interface and refined authorization mechanisms.

Both can be used to represent different types of services, but relying solely on contract standards does not automatically guarantee that service providers possess the actual capacity to fulfill and deliver.

A single credit might represent a diagnostic session, one hour of mentorship training, or single-use access to shared equipment. However, these are business meanings assigned at the application layer, not inherent attributes of the underlying standards.

Credential issuance must strictly align with actual service capacity. Selling unlimited credits when only five training slots exist constitutes over-promising regardless of flawless contract code; refunds and redemptions still require solid financial backing and execution mechanisms to backstop.

Reputation credentials belong to an entirely different category. Participants must never be able to directly buy the exact same qualification proofs that others have earned through hard work.

ERC-5484 supports issuing non-transferable credentials upon receiver consent and predetermined burn authorization, which is highly beneficial for voluntarily disclosed qualification proofs. However, "non-transferable" does not equate to proving uniqueness, honest character, or actual skill.

Furthermore, fully public on-chain credentials may expose sensitive social relationships, while the direct private buying and selling of full wallet account control remains a major risk.

For confidential professional credentials, the content of the credential should remain secret, proving only a specific statement to external parties: for example, "the current participant holds a valid professional qualification issued by an accredited evaluator."

Future advanced designs could even only prove that a participant has met a certain performance threshold, but this kind of declaration only holds meaning if the underlying real records, issuer rules, and integrity constraints are reliable.

If a zero-knowledge proof only showcases a select few positive reviews, it completely fails to prove that the party in question has no unresolved default records under their name.

This is why the system requires an independent credential architecture: it must offer timeliness validation while preventing the same qualification proof from being reused repeatedly to claim rewards. Scoped Nullifiers can prevent a single credential from being reused in the same operation, but that still does not equal establishing global one-person-one-identity authentication.

The payment stage equally needs to candidly face its boundaries. ERC-5564 allows the payer to derive a stealth address for the payee, reducing the direct explicit link between the recipient's public identity and incoming funds.

Yet it cannot hide the transfer amount, convert public escrow contracts into confidential states, nor automatically protect the privacy trail when the recipient subsequently spends that money.

Fully confidential fulfillment commitments and fund settlements require additional privacy infrastructure. Cheap Rollup transactions do not automatically equate to private transactions, and encrypted attestations cannot completely defend against side-channel leaks based on timing differences or network-level traffic.

Vitalik Buterin raised a similar point in *The Three Transitions*: scaling, smart contract wallets, and privacy must advance synergistically, which includes the privacy of identity and reputation. No application can strip everyone bare in its data model first and then tack on privacy as an afterthought.

Specific Fulfillment Protocol Operations and Dispute Resolution Mechanisms

Now, let's simulate the operational details of a specific agreement.

Suppose a customer agrees to pay 100 units for a repair, the technician posts a 20-unit performance bond, and the customer deposits the full 100 units into an escrow contract. Both parties jointly confirm the fault diagnosis workflow, completion deadline, quality standards, acceptance criteria, dispute resolution path, and maximum penalty for breach.

Please note that the above numbers are illustrative only. When deploying a real system, one must carefully select the payment asset and fully consider fiat volatility risks or the issuer's centralized control.

Once successfully accepted and completed, the contract releases the 100-unit remuneration to the technician and refunds the 20-unit bond to its source. If the technician fails to start and misses the agreed deadline, the customer receives a full 100-unit refund and claims predefined compensation from the bond. Whether the breach forfeits the full or partial bond must be clearly stipulated before taking the order.

If the customer disputes the quality of the completed repair, the smart contract does not guess who is lying but automatically enters the pre-agreed dispute resolution process.

An independent evaluator intervenes to verify acceptance evidence, inspecting physical equipment if necessary. Their ruling determines how the escrow contract allocates funds within the pre-agreed range acceptable to both parties.

The smart contract enforces the binding rulings on asset transfers, while the independent evaluator provides professional judgments on physical reality. These two roles must never be conflated.

During the dispute adjudication period, relevant evidence should be securely encrypted and stored, accessible only to necessary parties, and committed on-chain using proper randomized salt commitment schemes when appropriate.

Directly hashing predictable personal information without salt and publishing it on-chain still leaks sensitive data; meanwhile, the original evidence files must remain retrievable and viewable, as a single hash string cannot adjudicate disputes alone.

This mechanism must also preset fallback options: what happens if an evaluator goes offline? How are appeal deadlines set? What are the final settlement rules if the fallback process fails? Lacking these boundary clauses, a system marketing itself as "trustless" could instead indefinitely freeze user funds.

The same structure fully applies to learning mutual aid agreements: sponsors fund rewards for learners who pass practical assessments, mentors commit to providing specified coaching hours, and learners commit to investing time in practice.

Where feasible, instructional coaching and graduation assessments should be separated; all incentive funds must originate from actual pre-raised budgets, downstream client demand, or transparent external subsidies, never materializing out of thin air simply because an agreement issued a new token.

While bonds help deter dishonesty and misconduct, excessively high deposit thresholds will shut out those who need opportunities most. Therefore, newcomers should start with low-value small orders, limited risk exposure, phased disbursements, or sponsored models. Any fair system must leave a channel for newcomers to accumulate their first reputation.

Subsequent reputation records should objectively reflect the actual cooperative dynamics of all parties: the technician's delivery quality, the customer's cooperation level, the mentor's attendance rate, and the evaluator's reliability. A single unilateral complaint should never instantly become a permanent public conviction; ongoing disputes, resolved cases, and expired records require differentiated treatment.

Even with these measures, attackers might still create numerous sybil accounts for wash trading, fabricate fake transaction volumes, or honestly build a good reputation before pulling off a massive rug pull. Simply counting on-chain transaction volume is far from enough.

A pragmatic response is to strictly control risk exposure while credit evidence hasn't fully accumulated: cap early order amounts, closely screen frequent recurring counterparties, introduce independent third-party verification at critical junctures, and gradually scale up trust limits. A track record built on ten tiny successful orders should never automatically grant someone authority over a massive treasury.

Human judgment will always play a role in determining which types of evidence carry more weight. Each community should make these credibility rules public and allow competitive cross-explanation mechanisms, rather than pretending that a single numerical score reveals a person's entire character.

Community collaboration similarly requires constrained boundaries. Project issuers cannot arbitrarily alter rules after protocol funding is secured; community regulation changes should only apply prospectively, accompanied by ample notice periods and frictionless exit windows; emergency management powers must be strictly scoped and fully transparent.

Participants who leave the community must still fulfill obligations already contracted; however, mere ideological disagreements with core community administrators should never serve as an excuse to confiscate unrelated personal assets.

For project launch fundraising scenarios, this commitment-based framework can similarly replace empty promises: funds can be unlocked in tranches against agreed R&D milestones, unused balances must have predefined disposal rights established beforehand, team contributor allocations unlock cyclically, and changes to fund usage privileges incur mandatory delay periods.

The aforementioned measures can reduce specific types of extraction and arbitrage vulnerabilities, but they neither guarantee commercial success, ensure inevitable token price appreciation, nor protect against permanent smart contract hacks. Even completely immutable code can meticulously execute an unfair rule set to its bitter end.

Incremental Pilot Paths, AI Agent Participation, and Real-World Boundaries

For this reason, the first experimental version should strive for minimalism and restraint: serve a single community, use a single settlement asset, focus on one type of trade, adopt a transparent dispute process, and issue no speculative governance tokens.

Deploy and test escrow contracts and settlement paths on the Sepolia testnet first, thoroughly validating branch scenarios such as on-time completion, unilateral cancellation, overdue delivery, dispute review, evaluator absence, and appeal expiration.

Developers must rigorously verify that assets are never double-spent, and that every terminal state allows all staked and escrowed funds to reconcile perfectly to zero; during privacy feature testing, synthetic simulated data should be used exclusively.

Gradually introduce a confidential credential layer afterward, conducting live tests to verify actual privacy leak boundaries before importing any real personal sensitive history. Before launching a small-scale real-money pilot, independent security audits must scrutinize the contract and privacy design proposals, scaling outward steadily only after the empirical system proves effective.

Success metrics should tightly focus on genuine indicators: number of actually completed orders, repeat customer ratio, dispute resolution turnaround time, bad debt loss rate, privacy leak incident count, and true earned income after subsidy deduction. Steadily rising token prices must never substitute for these hardcore business outcomes.

AI agents can eventually participate in this collaborative network as well. Taking the ERC-8004 standard as an example (which was still in Draft status as of this writing), it proposes an identity registry, reputation registry, and verification registry framework for agents.

This standard provides a helpful reference template for agent discovery and result feedback, but it guarantees neither that 100% of claimed agent capabilities are authentic, nor does it constitute a payment settlement system itself.

In real-world applications, AI agents can take on clearly bounded finite tasks via accounts with spending caps and stake collateral according to the same commitment rules.

When the operator, underlying large language model, or permission configuration behind an agent changes, the system's weighting of its historical reputation should adjust accordingly: if the entire underlying infrastructure controlling the agent has been completely replaced, its once-impressive track record provides extremely weak grounds for guarantee.

The original intent of this entire line of thinking is not to claim that pure software code can reshape human society. Real-world physical violence, coercion, equipment theft, forged offline evidence, and extra-protocol power imbalances remain profoundly real.

Cryptography can only verify specific statements and constrain specific on-chain actions; it cannot simplify every earthly dispute into black-and-white mathematical facts. But at least it helps us reduce human collaboration's reliance on "blind trust."

We can provide ordinary people with a viable path to earning money that doesn't rely constantly on recruiting new bag-holders, protecting personal privacy while ensuring no promise degenerates into an unenforceable void; we can build collaborative communities with publicly auditable rules, restricted admin powers, and frictionless entry and exit.

Rather than predicting exactly which year governments will completely lose public trust or which month crypto anarchism will specifically return to mainstream culture, this represents a more pragmatic ambition worth dedicating energy to.

The next industry cycle will inevitably provide us with another opportunity to rebuild. What truly matters is whether this time we invite everyone into yet another high-rise barely sustained by market attention, or lead them into a real economy capable of surviving even after being battered by disappointment.

We have become highly adept at conjuring various tokens out of thin air. What we truly need to master next is crafting contract commitments worth defending, collaborative communities worth joining, and reputation mechanisms that protect individuals without requiring their life trajectories to be fully exposed.

Cypherpunks wrote their code decades ago to make freedom possible. The task set before our generation is to make that freedom genuinely secure and livable.

References and Technical Standard Sources

Note: The original text clearly distinguishes between tracing historical intellectual threads and the proposed prototype design of "Human Commitment Markets" discussed above; the integrated mechanism outlined herein is a conceptual design, not a claim that related integrated systems are fully built and operational in reality.

· Timothy C. May, The Crypto Anarchist Manifesto, 1988.

· Eric Hughes, A Cypherpunk's Manifesto, 1993.

· David Chaum, Security Without Identification, 1985, along with the author's official publications page (covering research on credential systems across unlinked pseudonyms).

· Wei Dai, b-money Proposal, 1998.

· Elinor Ostrom, Beyond Markets and States: Polycentric Governance of Complex Economic Systems, 2009 Nobel Memorial Prize in Economic Sciences Lecture; Mike McGinnis (Ostrom Workshop), What is Polycentric Governance?.

· ERC-20: Fungible Token Standard.

· ERC-1155: Multi-Token Standard; ERC-6909: Minimalist Multi-Token Interface.

· ERC-5484: Consensual Soulbound Tokens.

· ERC-4337: Account Abstraction Using Alternative Mem-Pools.

· ERC-5564: Stealth Address Standard.

· ERC-5192: Minimalist Soulbound NFT Standard (another finalized interface suitable for locking NFTs, not strictly required for the aforementioned tech stack).

· Vitalik Buterin, The Three Transitions, 2023.

· ERC-8004: Trustless Agents, noted as still in Draft status as of the original check.