Ancient Greek Democracy Digitized: The Birth of Smart Arbitration

"We took the logic of the Greek system and made it fit for the digital age," Federico Ast, CEO of Kleros told Sputnik, "we have a lot to learn from the Ancient Greeks."

Kleros is the brainchild of Federico Ast and Clement Lesaege and aims to solve disputes online using an automated system to arbitrate upon simple and complex contracts, "the Ancient Greeks devised their trials like this where every citizen had the right to judge," Ast says. Kleros works as a virtual justice system using blockchain technology to settle everyday disputes in an online court.

"No one will be able to tamper with the evidence or jury selection process, it is wholly transparent and that's where the blockchain technology is important," Ast explains. "Jurors buy a token and when they deposit the token in the website code it gives them access to the selection process." 

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​Jurors in Ancient Greece were chosen from a group of citizens who at the beginning of the year were handed a bronze plaque with his name and father's name and tribe inscribed on it, this was called a pinakion. The pinakia were used in kleroteria.

"Ancient Greeks would arrive at the kleroterion, which loosely translates as the 'altar of chance' with their bronze plaque. The kleroterion would produce either a white marble, which meant you joined the jury, or a black marble which meant you went home," Federico Ast explains.

"Kleros works like this, there is a random process that makes you a juror."

​Ast studied economics and philosophy at university before forging a career as an online journalist and editor at a major newspaper in Buenos Aires. After finishing a PhD in management, honing in on how collective intelligence works, Ast attended Singularity University in Silicon Valley where he rubbed shoulders with fellow blockchain enthusiasts — and Kleros was born.

"I was interested in open government. Lots of people were looking at voting systems but few were studying the justice system."

​Ast feels passionate about everyone having access to justice, "if you don't have money for a lawyer, you don't have access to a justice system and if we are to build a new justice system, it wouldn't be built on an 18th Century model, it would be based on crowdsourced technology and I was inspired by the Ancient Greek system," Ast told Sputnik. "Imagine having a jury of experts in anything from anywhere in the world?"

'Cool Tech'

"Kleros is completely built on blockchain technology. No one will be able to tamper with evidence or jury selection, the blockchain technology is decentralized, no one owns it, it's a community of users, a cooperative." Ast told Sputnik. "We don't get to choose how Facebook, Uber or Airbnb is governed, they enforce the rules. But blockchain technology gives us the tools to build the same kind of organizations that belong to the gig economy but the transparency of blockchain gives power to the user, not the owner, that's why blockchain is a cool technology."

While blockchain was born recently in 2008, "it's what's taking place inside blockchain that is very new," according to Ast, who sees himself and his peers as "digital revolutionaries". "There are people working in blockchain who are there to make money, others believe we are building governance tools fit for the digital age as the internet become a bigger part of our lives. Nobody has done this before using a decentralized autonomous system of cryptography and incentivization. It's unexplored territory. 

​Kleros isn't to be used in criminal cases or commercial contracts, but rather "the 99 percent of disputes that people have in everyday life, for example credit card companies, insurance disputes or cell phone companies," Ast says and hopes Kleros will become synonymous with transparency in the gig economy. "It's arbitration for both parties."

This is where the blockchain technology comes in; blockchain is a virtual chain of blocks each filled with data linking to the next block and the data held in that one, the data held in the chain is transparent.  According to Extra Credit Whitepaper, "Blockchain technology is advancing towards being one of the most secure ways to store data…the decentralized nature of blockchain technology makes it almost impossible to hack."

Smart Arbitration

The rise in the 'Gig economy' a term to describe the increasing trend in companies hiring independent, temporary and flexible workers or freelancers and paying them for each individual 'gig' they complete instead of paying people by day or by hour has led to the domination of the digital economy and the potential need for smart arbitration. Research by McKinsey Global Institute suggests up to 162 million individuals from the US and EU are independently working in the gig economy, which offers flexibility but no job security.

​"Digital platforms are transforming independent work, building on the ubiquity of mobile devices, the enormous pools of workers and customers they can reach… today these online marketplaces are used by 15 percent of independent workers. But the rapid growth of the largest platforms suggests we have only just begun to see their impact," the institute's brief, Independent Work: Choice, Necessity, and the Gig Economy states.

"Imagine I'm in Argentina," Ast says, offering an explanation of how Kleros works within the gig economy, "and I hire a guy in Guatemala to build a website for US$500 but the guy doesn't do a very good job.  But instead of trying to sue the guy for US$500, the money allocated for paying the guy is locked in a digital escrow [a financial arrangement where a third party holds and regulates payments of funds between two parties] but for the guy in Guatemala to get paid, an online jury with expertise in website design will analyse the contract and the product and vote on who is right. The losing party pays the jurors fees; it's an online legal system." Ast told Sputnik.

"Jurors will be able to make money from becoming a Kleros juror; this is where the system borrows from the Ancient Greek jury system."

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Kleros is in its infancy with the developers carrying out pilot tests to select jurors but with an eye to the future, Ast's white paper includes a quote from Greek philosopher Aristotle: "Whoever controls the courts, controls the state."