Kleros: Revolution of Dispute Arbitration

chadrona (63)in #blockchain • 7 years ago

What is Kleros?

Dispute can easily crop out from anything, and a dispute can be big or small depending on the situation. Though small dispute can be settled by having a serious conversation big disputes are usually settled in court.

When a dispute reaches the court it became a long, tiring process. Not to mention it can be very expensive. That is why most people even lawyers and judges themselves prefer disputes to be settled out of court. Unfortunately, it rarely happened especially for sensational cases.

Fortunately, this outdated way of solving disputes will soon come to pass with the advent of Kleros.

Kleros is a decentralized way of arbitrating disputes. A platform with cutting-edge technology built specifically to resolve dispute faster, fairer, cheaper and more secure. All of this thanks to the power of the blockchain and of smart contracts.

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How Kleros Work

Kleros just like the modern court uses the juror system to arbitrate disputes. But unlike the juror system of the traditional court, Kleros is more advance, and uses an incentive system that penalized and weed out incoherent jurors—thus it makes judging cases more accurate, not to mention a lot faster.

Jurors uses votes to decide a case, therefore it is imperative that the jurors votes correctly. Thus is where Kleros's advance incentive system comes in. That's because if a juror is incoherent and vote wrongly he or she would lose tokens, while those who vote correctly will be rewarded by more tokens.

How does it work?

The system will judge if a juror is incoherent by his or her track records. For example, if a juror voted and his vote is in the minority, meaning he the side.he voted for had less votes then they lose the case because the majority voted against it. The system will then keep a record and penalize the juror accordingly. If this happens majority of the time, the system will deem the juror as incoherent and it he will lose more tokens, not to mention his reputation effective.

Hence, a juror most analyze the case thoroughly before voting or he will lose out and be considered an incoherent juror by the system, the community and the clients.

Also, as mentioned earlier, Kleros utilizes smart contracts. The smart contracts is there to protect the parties involved. Let's consider the use case below.

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Use-case

Thomas is wanted to order a new mining rig for a certain cryptocurrency. He searched the internet hoping to find an affordable rig. Finally, he found what he is looking for and quickly contacts the company. But before he settles the order he asked the company to use a smart contracts.

The company didn't think much of it and agreed. So Thomas approaced Kleros because he have heard a lot of good thing about them. He then requested a smart contract for the transaction he is making. After settling the smart contract, Thomas ordered the mining rig and was told that his order will arrive in a week. Thomas didn't mind and waited patiently.

Days passed but the mining rig didn't arrives but since the one week quota isn't over yet he decided to wait. Unfortunately, he waited for nothing as one week passed and he still did not received his order. Upset, he contacted the company and was told that they are experiencing some sort of "technical difficulty" and his order will have to wait a little longer.

Thomas did not buy it and told them that they have a contract but recieved the same response. Angered by their nonchalant attitude, Thomas approached Kleros again and asked for an arbitration, which Kleros quickly respond.

A group of jurors specializing in such case was quickly formed. They then contacted the company and a trial was held. With the help of the smart contract, the jurors vote in favor of Thomas with non voting otherwise. They then ordered the company to settle their responsibility with Thomas—forcing the company to refund his money and pay another compensation for the breach of contract.

Happy with the result of the arbitration, Thomas went ahead and order another mining rig and this time found a more trustworthy seller and received his order in time. Maybe because of the smart contract made by Kleros, this new seller didn't cause any inconvenience for Thomas.

As you can see from the example, the effectiveness of Kleros and their smart contracts can make settling such disputes fairly simple. And the stated use-case above is just one of many that Kleros can arbitrate to and resolved.

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