Your Tokens Will Be Worthless If Blockchain Doesn’t Resolve Its Dispute Resolution Issues
You’re super bullish about the future of blockchain. You’ve bought in to the crypto and blockchain industry. You’re all in, HODL HODL HODL. Good for you. But you’re about to lose it all unless a key issue is resolved soon — some call it ‘dispute resolution’, others ‘arbitration’, and still others ‘governance.’ But make no mistake — this is not merely a technology issue. It’s a human issue.
Let’s take EOS for example. EOS is a blockchain marketed to small businesses. Token prices will increase based on supply/demand and use. If EOS (and every other blockchain) remains the domain of tech dudes, the total number of holders and users will remain low.
EOS needs to crack the ‘small business adoption’ puzzle for its token prices to skyrocket. But small businesses aren’t going to transact unless they have transactional confidence and certainty. In fact, no one (aside from early adopter tech experimenters) transacts unless they have transactional confidence and certainty.
This all comes back to designing fair, efficient, scalable, and transparent dispute resolution architecture.
Think about it — once upon a time, some 20 years ago during the web 1.0 era, there was a time when regular people and small businesses were afraid of buying stuff online. Because they didn’t know if they’d actually get the widget, despite paying for it. E-commerce didn’t take off until Ebay/Paypal, Alibaba, Amazon, and other sites put into place dispute resolution and reputation systems. (Reputation is also a piece of this puzzle but partially relies on identity — that’s a whole other topic).
And when e-commerce did implement dispute resolution, it did so with an eye towards scalability. Take Ebay/Paypal for example — knowing that their user based commonly transacted in the $20–50 range, they implemented automated online dispute resolution via a bot that resolves some 60 million disputes a year, with only some 5% of disputes ever involving a human being. This lowered the transactional cost of dispute resolution and allowed for massive scalability.
Will your mom or your friend transact using a system in which they will randomly lose value with no recourse? Will they bother to resolve disputes worth $20 if the cost of the human arbitrator will be $40?
Token holders need to realize that what will ultimately pump up the price of EOS (and many other tokens) in the long term is mass adoption by consumers and small businesses. And that won’t happen unless transactional confidence is built into the ecosystem through dispute resolution systems in a scalable manner.
The token holder community realizes that it needs to advocate for what will work for normal users, not necessarily themselves. And Block One needs to take some of its billions of dollars and put it towards resolving this problem — otherwise any tokens its management team still has will be worthless in the long term.
Amy Wan chairs the Dispute Resolution and Arbitration Working Group of EOS Alliance. She is the Founder & CEO of Sagewise, which builds dispute resolution infrastructure for the smart contract and blockchain industry. She authored the Bloomberg Law practice guide to ICOs and Lexis Nexis’ Private Equity practice guide. Amy is also the founder and co-organizer of Legal Hackers LA, which programs around the intersection of law and technology; was named one of ten women to watch in legal technology by the American Bar Association Journal and one of 18 millennials changing legaltech by law.com in 2018. She was a Fastcase 50 Innovators, Visionaries, and Leaders in Law awardee and Finalist for the Corporate Counsel of the Year Award 2015 by LA Business Journal.
Previously, she was partner at a law firm and general counsel of a real estate crowdfunding platform. Amy began her career in the U.S. federal government working on international policy at the U.S. Department of Commerce, U.S. Department of State and U.S. Department of Transportation. She holds an LL.M. in Public International Law from the London School of Economics and Political Science, a JD from the University of Southern California Gould School of Law, and a BA in Biological Sciences from the University of Southern California.