A real-world lesson in custody, incentives and “trustless” systems
You hand over your $1,200 Canada Goose, your wallet and your keys to a bored college kid behind a folding table. In return you get a little paper stub with a number on it. Then you walk away.
And yet… almost nobody robs the coat check.
It’s not because the system is technically brilliant. It’s a paper ticket. It’s not because the attendant is armed or the coats are in a vault. They’re literally hanging on a rack six feet away. Physically, robbing it is laughably easy—especially for the attendant, who has unlimited unsupervised access every single night.
So why doesn’t robbery happen constantly?
Surface-level answers (all true, none sufficient)
- The ticket is a crude non-fungible token: one unique claim per item, redeemable only by the rightful holder.
- Bulky coats are hard to pawn.
- There are bouncers, cameras, and witnesses.
- The attendant is dressed differently than guests and may draw suspicion if they try to walk out with a coat.
- Most humans aren’t criminals.
All correct. All incomplete.
Bear with me for a blockchain comparison
Now imagine the same setup but on a new blockchain project.
You deposit your assets into a multisig wallet. The “attendant” is able to honor redemption of your assets, or not. There is no face-to-face interaction, no venue, no reputation, no ongoing business. Just code and anonymity.
In that world, the “robbery” happens constantly. Rug pulls, drained treasuries, “lost” keys or whatever you want to call it. It’s trivial and consequence-free for the thief because there is no establishment to protect.
The technical difference is night and day:
| Coat check | Anonymous multisig |
|---|---|
| Centralized custody, physical enforcement | Decentralized custody, zero real-world accountability |
But the actual reason people don’t rob the coat check has nothing to do with technology or custody models.
The real reason: the establishment has too much to lose
The coat check doesn’t exist in a vacuum. It lives inside a profitable business—a nightclub, a restaurant, a theater, a wedding venue—that makes money night after night, year after year.
That establishment has:
- Reputation capital it cannot afford to burn.
- Repeat customers who will simply stop coming if coats start disappearing.
- Staff who know they’ll be fired (and possibly prosecuted) if theft is even suspected.
- Social media that amplifies any scandal instantly.
Even an unsubstantiated claim of theft can tank the venue’s Yelp score, get it dragged on TikTok and scare away high-spending customers. The business owner may rather eat the cost of a stolen coat, or fire an attendant, than let a rumor spread. This economic reality is what actually secures the coats—not the paper ticket, not the attendant’s honesty, not blockchain.
The system works because an establishment is valuable and theft is an unacceptable risk to that value.
What about pop-up events, temporary establishments?
Can we challenge the assumptions about the establishment above. What about?
- A one-night pop-up event with no brand or repeat customers.
- The last night of a venue that’s closing forever, where the lifelong owner is not present.
- A venue which already has a reputation for theft.
Well, what you are showing are establishments that aren’t established. ⊥
So what does this mean for crypto, NFTs, and “trustless” systems?
We spent years celebrating anonymous, permissionless, trustless protocols as the future. And in many ways they are.
But the coat-check analogy reveals the simple truth: custody and other trust-based applications depend on establishment. And this includes reputation, profit motive and other incentives.
A blockchain multisig run by anonymous signers with no ongoing business can steal from customers tomorrow and the thieves disappear into the ether. You can prevent this by having any multisig or no-recourse custodian be managed by a third-party with reputation to lose. Then after you have a profit-making establishment, think about bringing it back in-house.
The paper ticket works not because it’s a sacred bond, but because it sits inside an establishment whose profits and reputation are on the line every single night.
That’s the real security model.
And it’s why your coat is probably still hanging there when you stumble back at 2 a.m. with (or without!) your little stub in hand. 🎟️
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