I think the level of trust at the point you do business may in fact mostly be binary. The scale of 'so little trust I need to use blockchain' is pretty high, I'm not sure there are that many reasons to do so.
> The scale of 'so little trust I need to use blockchain' is pretty high.
Let's say a family member comes to you and say: "hey duxup, I have some medical bills to pay but I am short of a couple of grand. If I go on my credit card they will charge me 10% interest/year. So I was thinking of borrowing it from you and pay you 5% interest. By the way, here is the key to my car which is worth double the debt, the car is yours if I don't pay in time. It's a good deal for me, it's a good deal for you and you have no risk of losing your money"
You might say "Oh, it's a family member, so I trust you. You can have the money, pay back whenever you can". Which is fine. Or you can actually say "Alright, I will take the deal" and just hope that he gets to pay you back without any incident. In any case, no legal entities involved (every one is just going by the word) and the cost of settling a dispute is more of social capital (family troubles) than actual money.
Now, suppose that instead of a family member, it is a co-worker that you know for just a short while. You don't know if the person really had medical issues and you have no personal reason to be connected to the person. But you can get the keys for the car and you got some kind of legally-binding document regarding the conditions of the loan. It seems like a good deal, so why not take it? Not to mention the social capital, is a couple of hundred dollars "profit" worth the risk of having to deal with an someone you don't really know and all the potential troubles?
Now, supposed that instead of a co-worker, it is a total stranger online. You have no clue if the person needs the money for medical bills or if the money is for cosmetic surgery. In fact, it could be just for them to spend on drugs. Still, whoever is proposing the deal has placed a token that controls ownership of a car under a smart contract. If the loan is not paid, you get the token and you can easily sell the car on a distributed marketplace. And by the way, the token keeps a verifiable record of the car history, so any potential buyer can be sure of its value. All of this (giving the loan, checking the car value, signing on the deal, enforcing the rules and resolving potential conflict) can be done on a web3-enabled browser and costs maybe ~$10 in transaction fees. Why wouldn't you take such a deal?
How many of those friends would you put to invest in a house with you?
Hell, how many of those friends do you trust to give you a backup key to your house for emergencies?
Trust is not binary.