Abstract
In recent years, the digital economy has experienced a growing number of transactions. Traditional dispute resolution methods such as court and international arbitration are ineffective for handling a large volume of small value claims across national borders. Decentralized justice is a new approach to online dispute resolution that combines blockchain, crowdsourcing and game theory in order to produce resolution systems which are radically more efficient than existing methods. This article offers a review of the decentralized justice industry and of the key players participating in it. It presents a number of key dimensions of the industry and reviews the mechanism design choices made by these different platforms. Finally, it discusses a growth hypothesis for the industry and how it may grow in the future.
Highlights
In 1958, the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards1 (New York Convention, 1958) was signed with the goal of addressing the rising disputes of international commerce and investment
The rise of the internet and digital commerce created a new breed of disputes of a different nature from the multi-million dollar cases for which the New York Convention framework was built
1“Recognizing the growing importance of international arbitration as a means of settling international commercial disputes, the Convention on the Recognition and Enforcement of Foreign Arbitral Awards seeks to provide common legislative standards for the recognition of arbitration agreements and court recognition and enforcement of foreign and nondomestic arbitral.awards.” 2As an illustration, the average transaction in e-commerce is $102 while the cost alone of filing a dispute in a commercial court in the Netherlands, the country with the lowest costs compared to the European Union and North America#, is €15
Summary
In 1958, the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention, 1958) was signed with the goal of addressing the rising disputes of international commerce and investment. The rise of the internet and digital commerce created a new breed of disputes of a different nature from the multi-million dollar cases for which the New York Convention framework was built. The transnationality of e-commerce combined with the requirements for shorter and cheaper procedures give reason to expect rapid growth of the online dispute resolution industry (Schultz, 2002). Over the last couple of years, new projects arising from a field called decentralized justice are giving new air to this industry by promising an innovative way to provide a fast and affordable dispute resolution process for the new small value claims of the digital economy. In the last two sections, we consider possible adoption scenarios for decentralized justice in general and dispute resolution in particular
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