Blockchains and Online Dispute Resolution: Smart Contracts as an Alternative to Enforcement

As cross-border online transactions increase the issue of cross-border dispute resolution and enforcement becomes more and more topical. Disputes arising from ecommerce are seldom taken into the public courts and therefore online dispute resolution (ODR) is becoming a mainstream solution for resolving them. Simultaneously, different applications and possibilities of blockchain technologies such as cryptocurrencies have caught the attention of both computer scientists and legal scholars, increasingly gaining momentum. However, the potential of blockchains reach further than their use as a currency: they can be used for the decentralised execution of programmable contracts known as smart contracts, completely without the need for intermediaries like e-commerce sites, credit card companies or courts. These possibilities have not previously been discussed in relation to dispute resolution. This article provides an introduction to this new technological possibility by examining self-executing smart contracts that utilise novel blockchain technologies. To demonstrate the logic behind smart contracts more concretely, a weather bet (i.e. a bet on what the weather is going to be in a given location) is translated into a programmable smart contract and then discussed in lines of code with further explanations. In addition to this, the author suggests that smart contracts could also be employed for the purposes of dispute resolution, which might provide a solution for the problem of enforcing ODR decisions. Instead of normative analysis, the article provides an introductory analysis of the legal implications that the blockchain technology has outside its application as virtual currency. DOI: 10.2966/scrip.130116.41 © Riikka Koulu 2016. This work is licensed under a Creative Commons Licence. Please click on the link to read the terms and conditions. * Riikka Koulu, Doctoral Candidate in Procedural Law, University of Helsinki, Finland, Visiting Researcher, the Cyberjustice Laboratory, University of Montreal. I wish to express special thanks to software developer Tom Eklöf for his irreplaceable contribution to this article, both in drafting the Ethereum smart contract depicted in section 2.3 and in commenting this paper. The whole code is available at https://github.com/ORBAT/solidity-tryout/blob/master/bet.sol. All errors and misconceptions in this article are mine only. (2016) 13:1 SCRIPTed 41 1. From Online Dispute Resolution to Blockchains?