You can view the video of our presentation on youtube at https://www.youtube.com/watch?v=JVUSHZkBsq8;t=355
This article describes a possible Distributed Reputation system based on blockchain technology. Thereby pre-empting any scary centralised government plan (like the Chinese Social Credit System use) to enforce your reputation. I’ll try to explain why you might want to do this.
At this moment your credit worthiness and trust remains in several silo’s: your credit rating, AirBNB score, Reddit karma, LinkedIN connections, etc.
Instead you want to show the partners with whom you start an agreement with how much your surroundings trust you. Backed by real money and history, instead of likes and followers.
Instead of a credit rating, you can build on your own “guarantee rating”. If you want to remain in control of your monetary reputation in this reputation economy, this is how you might want to build it.
A little background
Where did this idea come from? I attended the BCH-DEVCON-NL on 27 & 28th of October. The Bitcoin Cash hackathon organised by BTC.com. Several themes popped up a lot: Micropayments with Moneybutton, Proof of identity and collaboration. I started with a group that wanted to do create an identity mechanism based on ‘proof of human work’ via assignments and pictures. This project already provided means to create an identity, track record and reputation. But what is worth? Not much if it ain’t backed by money.
So the 2 of us forked off and started on a concept for a distributed reputation system. We talked to about 12 different people. Ranging from passer-by’s, economist and jury’s. Before coming up with this proposal.
Better to remain ahead of the government, maintain your own reputation, escape the data silo’s and start over if things turn sour. So here is our proposal.
How it works
The picture below shows the overall concept with an AirBnB example.
The Renter wants to go on a vacation but as a trustworthy young person with not to much money to guarantee everything, his online reputation normally doesn’t go that far.
As a Host you want to know if you can trust this renter to your little AirBNB appartment.
But the immediate surroundings of the Renter can guarantee as a Backer. The Backers will put some money on the line and get some in return if things go alright. But they get really angry if things do not work out well and they lose the money they guaranteed.
Use the following legend:
Blue boxes: Smart contracts
Black arrows: Initial actions
Green arrows: Happy flow results
Blue arrows: What happens when things go sour.
The basic idea is that you want to create trust between the Host and the Renter for the duration of the transaction. Therefore the Renter deploys a Reputation Contract on the blockchain. Where the backers can put money in (and withdraw if it’s not locked). Thus basically establishing a guarantee for the Renter for when the renter needs a guarantee.
When the Renter wants to create an agreement in the real world that works over a period of time he can put his Reputation Contract to work. This is done by deploying an Insurance Oracle between both parties. The Renter puts the rent of the BnB in the Insurance Oracle and allows the Insurance Oracle to freeze the collateral at the Reputation Contract. The Host puts in a fee for insurance at the Insurance Oracle. Which acts as an incentive to the Backers.
If things go alright, both the Renter and the Host sign off on the Insurance Oracle. Then the host gets his money, the renter creates a positive transaction history and the backers get some piece of the premium. (As a reward for backing) If things go sour then everything remains locked and is escalated to the Escalation Oracle. The Escalation Oracle can then try to resolve the dispute via an independent reporter, 2 out of 3 reporters or just escalate a local court.
As an example we used AirBNB, although this works across all silos and where you want to establish trust before agreeing to a transaction.
We pitched this at the end of the hackathon. You can see us both starting at the 5:55 mark in the video below.
Check the presentation on slideshare. https://www.slideshare.net/jhaand/blockrep