This prototype had a single arbiter per transaction, but there is no reason why you couldn't have N arbiters on each transaction, for as high an N as you want.
Imagine having, say, three arbiters for each transaction, and two of the three have to side with one side in order for the money to be moved. This cuts down a lot on the potential problems, especially if the arbiters were kept anonymous from one another, thus preventing collusion and making sure that each investigation is independent from the others.
On the contrary - in the real world, trust is unavoidable.
Disregarding the obvious familial trust, I trust the manufacturers of the food I buy not to poison it. I trust that the gas pump is actually pumping gas. I trusted the bank teller to deposit the cash I gave her into my bank account and not just put it in her pocket (a trust her bank shared as well.) I trust my employers to pay me and my employers trust me not to steal their IP.
Of course, in each of these cases, there exists a system to enforce regulations and punish infractions when trust is broken, because while trust has to work in many social and business transactions, people cannot always be trusted not to cheat, lie and game the system. And yes, this means one still has to trust that system to an unavoidable degree.
