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DUCATUR’s dispute resolution mechanism: a simple and clear explanation

DUCATUR team has prepared the simplest example of its mechanism and description how useful and beneficial it might be for many different areas of business, for example, in e-commerce.

Buying and selling in the internet prior to the blockchain

Presently, the process of ordering or selling something via the internet looks like this: Firstly, you open your browser and go to Amazon’s or Ebay’s website. You then find the product you like and order it by paying through PayPal or with your credit card. Of course, the platform, your bank or other intermediaries charge commission for implementing your order and ensuring that you will receive your parcel.

In the event that you don’t receive your parcel and the vendor says that it has been shipped and delivered you have a dispute. You then have to call or write to the support service of the marketplace or to your bank in order to get a refund. There is a chance that the dispute will never be solved and that it usually takes a long time. In most cases these intermediaries give you your money back. However, this isn’t the best solution for solving this kind of a problem. Firstly, this method is not perfect because there is still the possibility that the buyer is willing to fool the seller or a malfunction might have occurred during delivery which leads to incorrect data. The dispute itself may lasts for months or even years and finally be solved unfairly, the risk being especially high when the opponent of the dispute isn’t an e-commerce giant but a small and ordinary marketplace or internet-shop.

Buying and selling in the internet — the modern way

The technological development of the blockchain and smart-contracts created a huge set of new opportunities for many different areas of business including e-commerce. This technology allows us to write special smart-contracts that effectively works like an arbitrator or judge and excludes most intermediaries by automating business processes. This allows the settlement of such disputes to be resolved far more cost effectively and with greater speed. However, there is the problem of dispute resolution and we believe that DUCATUR’s dispute resolution mechanism might be a perfect solution for this.

Thus, for example, you buy an item and it is purchased via a smart-contract. The smart contract ensures that the money goes to the seller’s account only after the item has reached its destination. In case of a dispute (if you didn’t receive the item), the information is processed through the nodes and arbitrators examine it. In addition, they analyze other sources of information, the possibility of fraud is eliminated as the arbiters are motivated to only supply genuine information as their profit depends on it.

That is an example of how the DUCATUR dispute resolution can be used.

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