I was discussing the recent scam backup software and mtgox issues with an anarchist friend of mine, and we got to talking about ways to establish trust in communities such as ours. This discussion lead me to two interesting ideas. The first I think would be more practical in the short term, while the second more useful at larger scales.

sponsorship

Here's how I imagined this working. A new user joins the community and wants to establish trust. They seek out a well known user who has expressed interest in sponsorship. In exchange for vouching for the new user, the sponsor will collect some number of Bitcoin or other currency. This will be held in trust for some period of time. If at the end of the initiation period, the user maintained a good reputation, they receive back their deposit less some percentage as a sponsorship fee. If the user defrauds members of the community, they are paid back from the trust. Another possible idea is that if the trust is not sufficient to repay losses, the sponsor would be liable for some percentage of the difference.

After thinking about it, it almost seems like reverse credit. Instead of using your reputation to borrow money, you're using your money to borrow reputation. Are there weaknesses I'm not seeing?

distributed trust database

Each node would keep a list of known identities and the trust level of each. If you want to trade with someone new, you contact your most trusted connections, who contact their most trusted connections, etc. I feel like this could be done rather simply, you wouldn't need a block chain since every node keeps its own list. Perhaps keys could be shared with Bitcoin... this would allow you to establish any particular address as a sort of identity. Would that reduce the anonymity of the rest of your addresses?

btw, sorry if this is a little rambly... [6}