KLEROS. Decentralized dispute arbitration system available to all!

norkamoran (51)in #blockchain • 6 years ago (edited)

KLEROS

Introduction

The development of online commerce has brought a huge number of transactions between online merchants and online buyers, of little or much monetary value, which have generated a high number of disputes to be solved. The resolution of disputes or mediation is understood as a system of negotiation, whereby the parties involved in a conflict try to solve it on their own, with the help of an impartial third party, who acts as a conductor of a session, helping the people who participate in the mediation to find a solution that is satisfactory for both parties.

It is vital for any company to have feedback with its customers, and the possibility of offering a good channel for complaints or complaints is still difficult to find in the world of electronic commerce. Many are the websites that offer the client simply an email address, so that he writes his claim, without knowing where he is going or how is the procedure (if there is one) for the resolution of the dispute, others offer better structured systems for the efficient resolution of claims. These systems establish a dialogue with the client, telling him when he will have an answer, however, there are parameters that limit the possible resolution, such as an unfair evaluation by unqualified persons, evaluations with criteria of partiality, some are slow and very expensive, which in turn generates large losses for some of the parties involved.

But how will Justice work in the Blockchain era?

Due to the deficits that the justice administration system has within the internet, Kleros is created. A method to resolve disputes about transactions, services or basically anything on the Internet. The role of Kleros is mainly focused on randomly selecting a court that will be made up of people from all over the world, some website experts, who will be able to see the evidence and decide who is right. It is a voluntary arbitration, where it is accepted in advance that between that dispute the conflict will be resolved by this court. In addition, the people who integrate this court will be chosen at random by a very specific method, they will analyze the evidence, they will vote who is right and then the money is transferred to the one who wins.

Kleros is a system based on collective intelligence and blockchain technology that judges choose for the resolution of any dispute, and from these juries will be created different courts that will be companies, which will specialize in the resolution of disputes in different areas.

What are the benefits provided by this new arbitration network?

Allows claims to be resolved in a clear, fair and safe manner.

In a Smart contract the parties make an agreement. This contract is an agreement in which the parties agree to comply with a series of conditions and their fundamental elements are the same. They are based on a computer program written in virtual code, a software that is programmed to carry out a series of tasks according to the instructions previously entered.

Kleros is a multipurpose arbitration system capable of handling a large number of disputes. Accessible for many cases of different uses.

Source

Kleros has a native token, called Pinakion (PNK).

The holders of the PNK tokens are eligible to become jurors in disputes that have been initiated by two parties that chose to use Kleros for the resolution of their disputes. In other words, each user can activate their pinakion, a virtual tile used in Kleros to opt for the possibility of being chosen as a jury in the resolution of the dispute, the more chips activated the higher the probability of being selected.

Kleros creates a public sale of their tokens where everyone has the same opportunity to acquire them. Seeks to make equal sales for large and small buyers.

Kleros has rejected the private sale offers of the main investors. Buyers are free to send a bid for tokens, but retain the option to voluntarily withdraw their offer if the 'maximum limit' of the sale is too high.

Generate more employment opportunities.

With this method, the recruitment of many more people is needed to solve the problems and this gives the opportunity to people from all over the world who can not work today. Kleros' technology could make a significant contribution to expanding the opportunities of workers around the world.

Kleros will resolve disputes that often do not get to be judicialized.

Simply because they are considered minor conflicts in what many times the justice does not accede for the costs that this implies and with this system it is looked for that the justice arrives at all the cases, lowering the costs of the disputes.

Why do you need a token?

The PNK tokens are used to encourage the jury that will resolve the dispute cases honestly. In the event that they judge honestly, they will earn money, but otherwise they will lose their PNK.

How does Kleros work?

The decision process of Kleros covers the following aspects

1.- Contract

When users choose Kleros as their dispute resolution system, they create an intelligent contract. Smart contracts have the ability to be automatically fulfilled once the parties have agreed to the terms. The contract establishes in which sub-court the arbitration will occur because each sub-court is dedicated to a specific type of dispute.

2.- Dispute

The dispute begins when one of the parties did not comply with the clauses of the established contract. In this case, we proceed to the search of the tests and next to the contract they are sent to Kleros with the security that the blockchain technology provides for its later evaluation.

3.- Selection of the jury

Anyone can apply as a jury candidate in a sub-court depositing their tokens (PNK). The selection is made randomly among all users who activated their token in a specific sub-section. Once the juries have been chosen, the pinakion are frozen. They will only be released once the court has delivered its verdict.

4.- Analysis

Jurors will rely on evidence from both sides and will evaluate the dispute to cast their vote. The tests are analyzed through different parameters and the conclusion is reached

5.- Voting

After analyzing the evidence, the jurors vote and reach a final decision. Once the jury issues the verdict, the pinakions are thawed and redistributed among the jurors. Each jury will win or lose tokens based on the coherence of their vote with that of the majority.

Here is an illustration of the process

norka grafico kleros.png

Uses Cases

• Any electronic commerce: when we sell or buy products online, there always occurs an incorrectness. For example, the product does not meet the agreed specifications, which could generate a dispute.
• Disputes in social networks: for example, if a person's comment breaks with the terms and conditions of the service that It use, Kleros can be used and cause the reputation reduction of that person.
• Online games: Games always create disputes and in this case it is very convenient to use Kleros to solve problems with juries experts in the subject.

My use case

I am from Venezuela, and due to the scarcity of products that exist, I had the need to make online purchases of the materials I require for the construction of my house. Several months ago, through a company dedicated to internet sales, I requested the purchase of 2 black water pipes under the specifications I needed. I always have the habit of asking all the necessary questions to make sure that the product meets all the requirements and in this way to continue with the option to purchase the product.

In this case, the seller answered each of my questions and clarified all my doubts, which generated in me the confidence to make the purchase of the 2 pipes. When I went to withdraw my order, everything turned out that the pipes did not have the characteristics that I had previously requested. I Try to talk with the seller but I never got a positive response. I had no choice but to present my disagreement in writing to the members of the sales page and present the evidence in the case. However, the only answer I had was, that because an intelligent contract was not made, I lost the opportunity to go to a dispute resolution process, and therefore, it was up to the seller to recognize his mistake and make the change of the product or simply the return of the money. From that moment I knew that besides losing my money, I lost my time and without counting how this affected the planning of the work.

This is a situation that shows us that we must be careful when making our purchases. With the use of Kleros everything will be different. Establishing a contract will be extremely important when conducting a negotiation, and in the case of a dispute Kleros will lead us to a reasonable process that meets our needs.

Conclusions

Kleros is a method that has great potential for the future and will influence the change of many legal procedures offered up to now.
With Kleros, the parties can determine the form of the agreement and from that agreement conduct a reasonable and logical process to end the dispute in an honest and impartial manner. In addition to this, a record of the process can be kept for the parties to use when necessary or when there are doubts.
Finally, we can say that whit Kleros we are facing the development of a real dispute resolution process that can be very useful to improve the practices of justice in the future.

Here I share a video