Topic: [IDEA] - Arbitration Guild - e-bay/pay-pal replace (Read 1028 times)

My concern is whether the arbitration costs associated with dispute resolution will make it practical to protect relatively small value transactions.

We actually have something akin to what you describe in pay-pal, visa, etc as I see things.  They spread the cost over all of their customers in terms of fees.

My idea is to spread the costs around by having a 'jury duty' of sorts, and also to leverage the effort spent into a lasting body of data which can be used to make better business choices by all participants.

One of my biggest concerns is related to anonymity of the belligerent parties in a dispute.  That is, how are they to provide solid evidence of their case in public while protecting their identies?  I suggest that here is an opportunity for businesses to form up which would validate and scrub evidence.

I believe that there would be decent pressure to not 'start clean' with a new identity very often.  I personally would trust a long history of positive results and am suspicious of new users without much of a history on e-bay.

I think multisignature and the availability of a trusted escrow party will work for about 98% of this.

This is just an idea that I dredged from my memory in an inopportune forum post.  I'm just transcribing and expanding on it here.

As a bit of background, my own (rather unpopular) view of the differences between Bitcoin and most other instruments are known to some.  In a nutshell, I consider any BTC I send to a vendor, exchange, bucket-shop, on-line wallet services, or whatever to be 'their' BTC.  I can only hope they give it back if appropriate, but I don't make financial transactions based on 'hope', and especially not with random Bitcoin enthusiasts who, at this point, I trust as little as almost any group I can think of.  Legal tender laws protect my USD-based business and not my BTC-based business, and that's exactly the way I like it.

All this is to say that I happily buy stuff with pay-pal, visa, etc all the time.  I've had to flex my muscle deploying charge-backs more often than I like when some flaky ass-wipe didn't come through.  There is no way I'm just going to send someone some BTC and hope for the best.  I would love to use Bitcoin more to buy real things, and that is the driving force behind this idea.

My conception of this idea is not that it is going to make anyone any money, but if it functions as I would hope it could bring people into the economy on the buy-side.  So, to the extent that there would be development and maintenance costs, sellers might find it particularly worthwhile to shoulder them.  I envision it as a pretty light system without many operational expenses.


The idea:  An 'Arbitration Guild' where pretty much everyone who participates is in transactions is a member (unless they are kicked out.)

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Simple purchase - good case

 - Transactions normally take the form of the buying party sending BTC to a system which divides it into several parts and locks it with multiple keys.

 - When both parties of a transaction are satisfied, all keys are sent to the seller who grabs the BTC.  Done (except to piddle with some sort of a feedback and ratings system.)

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Simple purchase - dispute

 - If a dispute is called, a random selection of 'arbitrators' is called from the (large) pool.

 - there would be utter anonymity about who the arbitrators are, and attempting to break that  that get's one kicked out of the guild.

 - evidence, arguments, etc be they presented by the belligerents or called for by the arbitrators are in the public domain.

 - when the arbitrators have made their decision, the keys to the divided up blocks of BTC are released for the winner(s) to collect.  In this respect, the arbitration is binding.

 - because the evidence is public, a person who makes what are considered by general consensus to be uniformly poor decisions as an arbitrator could be kicked out of the guild.

 - because any arbitration would involve probably at least three arbitrators, a disruptive asshole would be less likely to cause financial harm as a result of mischief.

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For other types of services, the basic framework can support most escrow-like arrangements (which is in fact what is described above anyway.)

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One of the keys to this solution is that there is very little reason to act like a scum-bag even for those who's nature is conducive to doing so.  It's simply not going to gain them very much.

Another nicety is that the existence of disputes, the evidence, and the resolution is all in the public domain for research in deciding who to do business with.

I expect the compensation for the participants to be mainly:

 - they can leverage the solution in times of need

 - by being a member of the Guild in good standing, others gain confidence in doing business with them.

I expect that if the system works well it will drastically reduce the likelihood of successful theft or fraud and thus drastically reduce the incidence of attempts.  This is, in my opinion, one of the keys to success in the e-bay/pay-pal empire, and even there I have to deal with dirt-bags more often than I would expect.  I shudder to think of what my experience would be in Bitcoin-land without such a mechanism.

Obviously there is a lot to think about in design.  I don't have the time and interest at this point so I am just throwing these ideas out (with no claim on them whatsoever.)  Others might have had similar ideas but I do not remember them and did not find any in some scans of the forum though the search functions are pretty primitive.

Edit(s): minor tunings of the text.