Decentralised dispute resolution
Philosphy
Secession | Evolution | Voluntaryism (AW)
Individual municipalities shall be entitled to secede from the union. The decision on whether to initiate a secession procedure shall be made by a majority of the Liechtenstein citizens eligible to vote who reside there. ~ Constitution of the Principality of Liechtenstein
Such new rules would spread not because men understood that they were more effective, or could calculate that they would lead to expansion, but simply because they enabled those groups practising them to procreate more successfully and to include outsiders. ~ F. A. v Hayek: THE FATAL CONCEIT
unification & transaction costs
Lex mercatoria
Gerard Malines: Consuetudo, vel, Lex Mercatoria, 1622
Common economic protocols - Paralelní Polis & Bouvier’s 1856 Law Dictionary
- traders were creating their own regulatory framework independently from national law
- autonomous character, independent from any national system of law
Third parties
Local state court
Foreign state court
Private arbitration recognised by official authority
Escrow - multisignature with arbitrator with reputation
Escrow - multisignature with anonymous arbitrator
Two parties multisignature
Smart contract
Decentralised anonymous arbiters
Alternative dispute resolution
negotiation | mediation | arbitration | ODR
The dispute will be decided by one or more persons (the "arbitrators", "arbiters" or "arbitral tribunal"), which renders the "arbitration award". An arbitration award is legally binding on both sides and enforceable in the courts.
f.e. Rozhodčí soud při Hospodářské komoře České republiky a Agrární komoře České republiky
Alternative dispute resolution
negotiation | mediation | arbitration | ODR
- subject can be only property
- only Czech citizen
- exceptions are rare - decision is final
Zákon č. 216/1994 Sb., o rozhodčím řízení a o výkonu rozhodčích nálezů
Multisignature
Ricardian Contract
A Ricardian Contract can be defined as a single document that is
a) a contract offered by an issuer to holders,
b) for a valuable right held by holders, and managed by the issuer,
c) easily readable by people (like a contract on paper),
d) readable by programs (parsable like a database),
e) digitally signed,
f) carries the keys and server information, and
g) allied with a unique and secure identifier.
Dark Merkets
Finalize Early (FE)
Escrow
Multisignature
PAST
FUTURE
Kleros is a decentralized OPT-IN application built on top of Ethereum that works as a decentralized third party to arbitrate disputes in every kind of contract, from very simple to highly complex ones. It relies on game theoretic incentives to have jurors rule cases correctly. The result is a dispute resolution system that renders ultimate judgments in a fast, inexpensive, reliable and decentralized way.
“Whoever controls the courts, controls the state”. Aristotle.
Thomas Schelling
1921 – 2016
The Strategy of Conflict
2005 Nobel Memorial Prize in Economic Sciences
Schelling believes that experimental psychology has a major part to play in game theory, and famously said that formal thought is as unable to provide insight into certain games as it is to prove that a joke is funny.
Focal points
- absence of communication
- unique
- more emotional then rational
- people think what other people think
-
"focal point for each person’s expectation of what the other expects him to expect to be expected to do"
Join at Slido.com with #A895
Click on Polls
Focal points
Most bargaining situations ultimately involve some range of possible outcomes within each party would rather make concession than fail to reach agreement at all.
Focal point doesn’t provide logical explanation or simple justice, but at least can defend itself with argument, “If not here, where?”
SchellingCoin
The fundamental insight is that voting coherently with others is a desirable behavior that has to be incentivized.
Options for jurors
• “Reimburse Alice” transfers funds to Alice’s address.
• “Give Bob one extra week to finish the website” blocks new disputes for one week and removes this option from further dispute.
• “Pay Bob” transfers funds to Bob’s address
Privacy
1. When the contract is created, the creator submits hash(contract text, option list, salt)
contract text - the plain English text of the contract
option list - the labels of the options which can be voted by jurors
salt - a random number to avoid the use of rainbow tables
2. When contract is disputed contract text, option list, salt
IPFS
Jury random selection
The probability of being drawn as a juror for a specific dispute is proportional to the amount of tokens a juror deposits.
Random numbers are generated with sequential proof of work using a scheme similar to Bunz et al. adapted to also work for Proof-Of-Stake blockchains. ??? Why not nonce?
Votes
Jurors submit hash(vote, salt, address)
The address - the Ethereum address of the juror, it is required in order to make the commitment of each juror different, thus preventing a juror from copying the commitment of another.
We let any party able to show the commitment of a juror to Kleros before the vote is closed steal the pinakions of this juror and invalidate the vote of this juror.
1. Reveal only its vote. The party won’t have any proof that it effectively voted that way. The juror could lie about it and the other party has no way to verify.
2. Reveal its vote and its commitment. The party would have the proof of its vote, but the party would also be able to steal the pinakions of this juror.
The option with the highest amount of votes is considered as the winning one.
Incentive system
Appeals
Each new appeal instance will have twice the previous number of jurors plus one.
If a verdict is appealed, jurors of the appealed level are not paid (but they are still affected by the dispute due to token redistribution). This incentivizes jurors to give explanations of their rulings.
Attack resistance
Sybil Attack
Bribe Resistance
Decrease of value of tokens
Exponential growth of the price of tokens
Eventual difficulties
Criminal law, Reparation of Damages | Only what you deposited
Only a natural obligation
Parallel official enforcement - wait but taxes?
Bribe of judge is possible and very easy
Bear evidence
Community, ICO, Legal form
Potential improvements
Anonymous jurors with common interest
Jurors selected truly randomly
Bribe of juror is less possible
Abandon official enforcement scheme through prediction market
Prediction of future
Secession of small groups into parallel economy is inevitable with every new law, which tends increase transaction costs.
End of obligations starts for every person with no official physical property (renting scheme). As a result will be end of classical obligations.
If crypto-economy improves relations much better than the State with centrist model, majority of the market will stop pay taxes and start to fund companies directly.
Different taxation schemes will be created.
Regulation of p2p economy
Airbnb
Uber
...
Délka civilního řízení u obvodních soudů
Mapa exekucí
Česká republika 2017
Počet osob v exekuci 863 tis. +3,4 %
Počet osob se 3 a více exekucemi 493 tis. +0,8 %
Podíl osob v exekuci 9,7 % +0,4 %
Celkový počet exekucí 4,67 mil. +4,8 %
Vymáhaná jistina 239 mld. Kč
údaje jsou pouze za fyzické osoby
Source: http://mapaexekuci.cz/index.php/mapa-2/
Decentralised dispute resolution
By pavoltravnik
