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What Is Decentralized Dispute Resolution?

By George Khoury, Esq. | Last updated on

You may have heard of the concept of a decentralized distributed ledger thanks to the popularity of Bitcoin and other cryptocurrencies that utilize blockchain technology. However, a recent innovation along similar lines caters particularly to users of cryptocurrencies: Decentralized, distributed dispute resolution.

The idea is simple enough, if there's a dispute, the parties to the dispute can implement a smart contract that will effectively present all the relevant facts to a jury of users who are incentivized to render the correct decision. Then when the jury returns a decision, the smart contract automatically executes based on the decision. While this might seem a bit too futuristic and impossibly unreliable, Rome wasn't built on the first try. (That's how the saying goes, right?)

Dispute Resolution for Floating Cities

To the objective observer, the simple idea of online dispute resolution is probably still a bit too uncertain. Interestingly though, one of the first big uses of this blockchain-ish dispute resolution concept is being implemented by Blue Frontiers, which, and I'm not joking about this, is committed to building floating cities that cater to like-minded individuals.

If you needed any more convincing that yesterday's science fiction is today's reality, just go on over to Wikipedia for a look at what's going on in the exciting world of "Seasteading."

Crypto Dispute Arbitration

As explained by Kleros, the maker of the decentralized dispute arbitration protocol that Blue Frontiers plans to implement, it plans to help foster new models of governance by helping to resolve disputes fairly, securely, and efficiently. It uses smart contracts and a distributed network of juror-users who review the evidence provided by the parties and then receive crypto tokens based on the quality of their decision.

Though platforms like these seem ideal for simple disputes, like a dispute over the sale of goods, the newness means reliability will likely be an issue for some time to come, particularly for disputes with less objective criteria, or more far-reaching outcomes (like societal governance issues).

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