EscrowChain - An idea to build an Escrow Blockchain with Arbitration Currency
EscrowChain - A blockchain for Escrow Payments with Associated Arbitration System
Here's a scratch of our idea. A blockchain system to allow payments under escrow. It introduces a cryptocurrency called HON, inspired by honoraries earned by lawyers for solving up disputes. HON should be mined by Proof of Effort, a concept we introduce as well.
The HON idea
HON is a cryptocurrency that fuels resolution of disputes. Any two parties engaged in a dispute may agree on plunging into an arbitration mediated by a third party. That process mostly accelerates the resolution of a dispute and turns problem solving into a much faster and cheaper process. Once consensus is achieved by mediation, the escrowed value is released like agreed by both parties and HON is then mined. As in regular honoraries, HON is mined always corresponding to 20% of the value of the dispute to the arbiter (miner) involved in the mediation process.
Proof of Effort
Mining then is done by Proof of Effort since the arbiter must work the consensus in the dispute to be able to receive HON from the system. Arbiters are chosen by applying to the resolution of disputes and the one with more HON has precedency. This incentivizes the arbiter to hold HON. This way, the more HON, the better the chance to arbiter and thus mine. Also, HON value is always a direct measurement of the whole value involved in the system.
In the EscrowChain system we differentiate mining from processing validations since they are totally distinct. Processing transactions and validating them in the network is rewarded solely by fees while mining is not attached to the process. Mining then may be done by any user in the system with a private key while processing transactions is done with regular Proof of Work on full nodes. Validations only provide fees and hence, the system value/inflation stays stable.