NOTE: This article has been updated to reflect actual dates. For more information, view the Arbitration Update article here: http://bit.ly/2E0AWnC

By Douglas Horn

One of the EOSIO promises that Telos intends to keep is the institution of a valid, efficient arbitration system so that lost and stolen accounts can be recovered (when there is cryptographic proof of ownership) and so that other disputes can be resolved. With this, Telos will become the world’s first public, decentralized blockchain with a method to recover lost accounts. This fact alone will be a major differentiator between Telos and all other blockchains. Crucially, I believe that the ability to recover lost and stolen keys is one of the innovations that must occur before blockchain will be adopted by computer users at large.

EOS arbitration has had many delays and setbacks and its future is uncertain. Telos has an opportunity to redefine how users think about arbitration by making it faster, more cost-effective, and more legitimate than the EOS approach. Arbitration will have a clear focus of serving users while protecting the immutable, cryptographically controlled nature of the Telos blockchain. Arbitration also protects Telos from a Gordian knot of attempted intrusion by the court systems of the world’s many, many nations.

Telos Arbitration Update

So where is Telos on arbitration right now?

The Telos governance documents have been structured to provide a strong basis for arbitration and all Telos users. The on-chain management of the arbitration system resides in the arbitration contract, which is quite complex and advanced — probably as complex as the most advanced decentralized app on EOS or Telos. The arbitration contract controls everything from the nomination and election of arbitrators to the filing, processing, and resolution of cases — all on the Telos blockchain. The Telos Core Developers have been revising and improving the arbitration contract and are now proposing an updated version of it to the block producers for their approval. Assuming the block producers vote to adopt the updated code, the first arbitrator election can begin within days.

Why elect arbitrators?

Arbitrators will have the authority to order new transactions to be recorded on the blockchain. (They do not have the power to change anything already recorded on the blockchain — that’s not possible.) This is a massive power and for it to be legitimate, it must be derived from the Telos users. For this reason, the Telos Launch Group rejected the idea of appointing any initial group of arbitrators. It was deemed more legitimate for the arbitrators’ power to only be assigned by a vote of the users. Hence, an election.

One unfortunate side effect of not appointing initial arbitrators is that during this early period, Telos does not have any arbitrators to handle dispute resolution. We have been fortunate that there are not a large number of disputes so far, but there have been questions where arbitration would be very useful to some users. There are lost keys, mis-sent transactions, and a persistent scam site that has stolen some private keys. Without arbitrators, there is no basis for the block producers to take any action in these cases. We now feel that there are enough users to have a legitimate election and that educational materials for understanding and performing arbitrator elections are also available so that the users can understand the process.

(See the Telos Users Guide: Understanding Telos Arbitration & Elections, Tutorial: Arbitration Elections)

When will the election begin?

The Telos Core Developers are making a proposal to the block producers that will add the new arbitration contract code to Telos and at the same time configure the first election. The proposed timeline is to begin the arbitrator candidate nomination procedure on Thursday, February 7th and giving candidates one week to nominate themselves. Voting would then begin on Monday, February 14th via Sqrl wallet, and possibly the online portal tools currently in development. The election period is 5 million blocks (about 29 days) so voting would conclude on or about March 15th. Candidates who seem likely to be elected during this period (based on ongoing vote counts) will be able to use this time to prepare for service so that arbitration cases can be filed and heard shortly after the election results are reported.

What can I do to contribute?

Arbitration on Telos will only ever be as good as the arbitrators elected to perform it. There is a saying in politics that “Democracies get exactly the representatives they deserve.” The best way to ensure the success of Telos arbitration is to encourage really good candidates to stand for election, and to have Telos voters carefully consider their options and vote for the candidates they trust.

We have been very fortunate so far that the TLG Arbitration Working Group, led by Brett Jeffries of Big Iron BP, has recruited a stellar group of initial nominees. These nominees have been featured on the Telos Foundation website for a few months now. Most are prominent attorneys (though this is not required) and one is an expert on the Telos key replacement process. And more high caliber candidates have been expressing interest in this role. Information about serving as an arbitrator is also available at that page.

Because the election is conducted by smart contract on the Telos blockchain, anyone who wishes to become an arbitrator candidate must officially register via Sqrl wallet to add themselves to the table of candidates. This means people who were already “nominated” on the Telos Foundation site, still have to go through the same process as anyone else.

Most users will participate through voting. You can vote for as many candidates as you wish. The maximum number of arbitrators is currently set to 21, so the leading arbitrator candidates who have achieved the minimum necessary number of votes — up to 21 — will be elected.

Nominations and voting are detailed in the Telos User Guide Tutorial on Arbitrator elections.

A Historic Election

Telos is making history with this arbitrator election, but more importantly, we are creating a way to better protect users from lost keys, scammers, and other threats. Arbitration will never be perfect, nor will it be appropriate for all situations. But everyone in blockchain has heard stories about lost keys, and stolen accounts where nothing could be done to return funds to their owners. Telos is taking a major step towards addressing these problems. We are blazing a trail for good governance that has a tangible and positive effect on users. I hope you will participate by running for or voting for arbitrators.

About the author: Douglas Horn is the Telos architect and whitepaper author, and the founder of GoodBlock, a block producer and app developer for the Telos Blockchain Network.

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