To the average scholar, the idea of record keeping may not stir the imagination like the great conquests and cataclysms of the ages, but according to MIT’s Michael Casey, record keeping and the trust it begets have played a foundational role in the development of civilization. The subject makes up the crux of his newly published, roundly lauded book The Truth Machine, written in collaboration with journalist Paul Vigna, which places blockchain in a context of record keeping and institutionalized trust that goes back almost 7,000 years.

From before Hammurabi’s Code in Mesopotamia through the Medici banks of the Renaissance to the emergent blockchain phenomenon today, the notions of trust, truth, and consensus have developed hand-in-hand with civilization itself, enabling everything from systems of debt and credit to financing the age of exploration and both the construction and occupancy of modern skyscrapers. We sat down with Michael Casey, who also functions as the Chairman of the Advisory Board for CoinDesk, for a breakdown of trust over the millennia, and why blockchain represents such a profound leap forward for civilization…

How far back does historical analysis of record keeping go?

If you go right back to the moment we moved out of kinship groups and formed wider tribal societies, what were the institutions that we created to form trust? Francis Fukuyama has written about this: Language and things like that are actually institutions that enable trust. I think of language almost as a protocol. It establishes a set of rules through which can communicate, and therefore we break down trust by virtue of having a common language. That’s one of the reasons we have mistrust across languages, right?

So language is almost right there at the beginning. And then we move on to the early transactional records of Sumeria and Mesopotamia, as long ago as 7,000 years, the first ledgers. And that’s really dealing with economic exchange, human exchange. That’s the stuff of civilization. The capacity for us to enter into economic exchange means we create things. We’re not able to do it unless we trust each other’s claims of what we’re owed, a general ordering of information around debt — which is really what money is, a means of tracking debt. It all begins there.

So how do we get from Babylon to modern banking?

Another key point in history to think about is the Renaissance at the end of the 15th century, when double entry bookkeeping became the standard by which banks especially and businesses in general adopted this balance-based way of reporting their books. That enabled the modern payment system. Once banks were able to debit one person’s account and credit another’s, they were effectively creating a payment system, which meant they eventually became the means by which we created money.

The Renaissance, the industrial revolution, the modern world, was created on the back of banks as bookkeepers, the centralized ledger keepers of all of our debt. Our payments became much more expansive and international than was possible when all we had was tokens as forms of monetary exchange. We went from gold coins and paper to banks as the foundation of our monetary system and that meant that things really took off. The problem was, centralized ledger keeping…And this is what Satoshi Nakamoto was all about.

What was the effect of centralized record keeping on trust?

The numbers became just something you had faith in, a kind of religious faith. And to this day, it’s the same. We bring in auditors and do reconciliation across accounts to keep track of it all, but at the end of the day, we really don’t have any choice but to trust the ledger keeper. We can then draw a line right through to 2008 and stop at Lehman Brothers and ask: How is it that in 2007, Lehman Brothers recorded the best year in its history, phenomenal profit growth, and nine months later, the entire bank was completely bankrupt and it almost brought the entire global economy to its knees? Our faith in those financial reports was founded upon this faith in the numbers. It’s hard to get away from centralized ledgers, whether it is the ledger of the banks or of the auditors, they’re all compromised by their own self interest.

Now we have all the skyscrapers of the world filled up with accountants, all reconciling their company’s books against the books of their counterparties because there’s no trust. Reconciliation is what we describe as one the biggest and unspoken forms of the cost of trust. It is profound. It runs deep, deep, deep through our economy. And we don’t even think about it. We just take it for granted, that we should spend all of this money double checking and reconciling and, in quite often, rejecting transactions. It’s all the cost of trust. We’ve resolved some of it through centralized ledger keeping, but it’s fundamentally imperfect. Trust is critically important, but we’ve had very imperfect measures of maintaining it.