Kleros and how it will change the way individuals and businesses deal with disputes!
°•° What is kleros?
No one wants to move out of his/her apartment to make a pircgae anymore. Most purchases are lrefarably made from residents. Ease of transaction is what everyone demands these days. No one wants to undertake the stress of going to the store or consultant,visiting every time you need to make adjustment or complaint and every other things. But of resent , digitalization has taken over the transaction style and globalization has increased efficiency in transaction, and most transactions are conducted miles away between the buyer and the seller. Often, differences occur between what was requested for and what was delivered.
°•°°•°**USE CASE #1;, Sayid requested for Balenciaga wrist watch on a shopping platform similar to the one he saw on Drake at his concert, the watch was delivered, but it wasn't what he requested for, but when he saw the picture on the shopping platform, it wasn't exactly the same with the one delivered, and sayid feels bad about this. . How do you return a product sent from 5000 miles away, how do you sue the person over a product of 500$, it's not making sense right?.I wouldn't ,I'll let it go. But, what if this happens again , and again , and again. Losing $500 dollars on each transaction, that's $1,500 already( getting big right). When disputes arise from here, difficulty often arise and it becomes hard to settle most issues. But what if there's a platform that serves as a court?, yes a court with jurors , who settle disputes when differences arise during transactions. That's why KLEROS is here , to solve disputes that emerges between two parties.
It is an Ethereum autonomous organization that works as a decentralized third party to arbitrate disputes in every kind of contract, from very simple to highly complex ones.
°•°°•° °•° The Schelling coin mechanism
Schelling coin by " Game theorist Thomas Schelling developed the concept of Schelling Point". The Schelling point serves as a basis for trust. Conducting transactions with a stranger often requires a high level of trust. But most times, you can't even meet the person to talk about the business. That's the usefulness of the Schelling point. The Schelling coin "Ethereum founder Vitalik Buterin has proposed the creation of the Schelling Coin" which ensures a user tells the truth ,as in lieing on a particular detail or information will make this user lose some portion of his incentive/coin.
USE-CASE #2: How do I know if MacDonald's burger is currently $1? ,all I have to do is ask and replies will receievwd and the majority vote will be considered as valid (YES IT'S $1) and other votes will be notified and points will be deducted from their account for providing a false info and credit those who provided the right answer. So, you can easily know if a consultant at a particular location is the right ma for your job or not .
Pinakion.
This allows jurors to vote honestly and anyone who oppose this will lose some of his coin I.e voting negatively to the motion on ground and falling under the less majority vote. Pinakion ensured that jurors vote honestly.
What are some types of disputes that can be resolved through Kleros?
°•° When a disput is requested to be solved , a court that specializes in the topic of the transaction will be selected.
For example, a web design contract will chose a web design court, a house contract will select a house contract court, a packaging design contract will select a packaging design court , etc.
°•°°•° looking at the example stated, sayid can make a request to kleros to enable the court to sit on the issue. He could put forward the following motion '"refund sayid'", "'allow the shopping platform to change the watch and redeliver"". Putting this motion forward, the juror then vote on what to do, and the majority of vote will be the decision to be made. The juror may vote on " refund sayid". The shopping platform has no other choice than to refund sayid.
How can Kleros help reduce the costs associated with dispute resolution?
°•° Instead of taking a dispute to a real court which will cost the parties a significant amount of mony, they can simoly place their differences in the kleros platform with evidence and motion and approve juries to vote in favour of any of the parties. All you need for kelros is the Schelling coin to decide cases compared to a reality court where you could wvn be asked to pay for more than or close to the transaction cost( a transaction of 1,000, will be resolved with $800). Then where's the profit on the product itself. But with kleros, you can put your dispute forward and solutions will be provided at a really low cost.
How can this benefit small businesses?
°•° Small business that have low capital outlay can't undertake the financial capacity of taking a dispute to a real courthouse to be resolved as this will be relatively expensive but with kelros, their money is greatly minimised and their integrity is protected as well.
How can Kleros benefit large corporations who deal with many disputes (think eBay, Etsy, Amazon etc.)?
This organization often find themselves in multiple complaints from customers or clients and this leads to dispute formation. How do they handle all at once?. Do they take all to a courthouse or what?. Using kelros, all they need is just to input their dispute and fill in the motion and the evidence and leave the rest to the jurors to decide on the case.
How does Kleros ensure fairness through its incentivization system?
*Arbitration fee; This is the fee paid by each party so as to compensate jurors for their service for resolving a dispute. The arbitrable smart contract will determine which party will pay the arbitration fee.
#1. When each party are asked to pay and one pay lesser than the requited amount, he'll be considered guilty at the instance and the party with high fee will be paid the arbitration fee without even getting to court.
#2. The appellant also has to deposit an extra stake proportional to the appeal fees which will be given to the party winning the dispute. This way if a party makes frivolous appeals to harm the opposing party, the opposing party will get a compensation for the time loss, while if the appeals are finally ruled to be legit, the stake will be returned to the appellant.
Fairness is ensured in the sense that when a juror votes and such vote falls under the majority vote , he's rewarded with tokens and vice versa. To enable this fairness, jurors can vote and the other jurors can't see the vote of the other juror. A juror of 7, if 3 vote 'YES IT'S $1' and another 3 voted for 'NO IT'S NOT'. To enable fairness, the last juror's vote cannot be influenced by other jurors votes,, he can't view other juror's vote, He can't even know how many voted in favour of the $1 and how many opposed it. You simply vote of your own consideration and if it turns out to be a lie of falls under the less majority votes, you lose some tokens. The Schelling point system ensures fairness, that's what it's built for.
°•°°•° APPEALS;
After a vote has been conducted and the party is not satisfied with the result with the belief that the result received is still not right. He can then appeal for a revote and here, Each new appeal instance will have twice the previous number of jurors plus one. A revote can then be made and this will enable a more reliable result to be arrived at.
°•°•°•°•°What if majority vote makes an honest juror to fall under the less majority votes ?
"We cannot expect jurors to be right 100% of the time. No arbitration procedure could ever achieve that. Some times, honest jurors will lose coins. But as long as overall they lose less value than what they win as arbitration fees and as coins for other incoherent parties, the system will work"(Whitepaper page 9).
°•°°•°°•°°•°•°. Attack resistance;
A juror might decide to buy half of the token so as to enable him to be selected to decide on most cases. This is mist likely impossible considering the way the tokens are to be distributed and the way allocation will be done. This is practically impossible.
What if he then decides to bribe his way through a vote?.
A party may decide to bribe his way to be voted In favour of the dispute and this is why appeal has been put in place.
conclusion
Kleros is built on a blockchain model and this enables decentralization. No body can influence the operation of the system directly. It ensures right decision to be made and cases are decided based in the motion put forward and this ensures that parties gets judged rightly.
I think in the end, the shopping platform lost the case and refunds are paid to sayid. Case closed. Simple and logical.
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Kleros2018