Rich by Coin

The Blockchain Arbitration Rules allow a smart contract to pause execution when arbitration is triggered. All relevant information is stored on the blockchain: details of the contract and any email communications. Under the Rules, an authority is appointed to perform administrative work in connection with the arbitration. The arbitrator then calls an oral hearing in person or via video conference after obtaining all necessary information.

It is recommended that the parties to the smart contract incorporate an arbitration agreement, and a mechanism to allow the arbitrator to automatically enforce any award without the intervention of a third party, into the body of the smart contract. Multisig is a short term for multi-signature – a type of digital signature that requires two or more private keys to sign and verify a transaction. It is used to enhance the security and privacy of cryptocurrency transactions, and to enable more complex and flexible scenarios such as shared wallets, escrow services, or voting systems. The multisig mechanism enables parties to a smart contract collectively to nominate an arbitrator who is then able to insert directly on the blockchain a remedial transaction by transferring value via the blockchain in fulfilment of the arbitration award.

In 2017, Datarella – a blockchain solutions provider – conducted an arbitration proceeding using blockchain technology, where the smart contract governing the relationship between the parties contained an arbitration clause referencing the Blockchain Arbitration Rules, which are based on the UNCITRAL Arbitration Rules. Smart contracts may be put to several uses in society. First, financial organisations can leverage smart contracts to record financial data in an accurate and transparent manner.

Second, smart contracts can automate the manual process behind a mortgage contract by automatically connecting the different parties involved with mortgage transactions. Third, smart contracts provide visibility at every step of the supply chain. Smart contracts pose several advantages, albeit with some difficulty that may arise – it is difficult to combine the technical code written by computer coders with legal prose drafted by lawyers in a standardised and seamless manner.