Blockchain: Creating a Decentralized Reputation-Based Society

By CIOReview | Thursday, March 15, 2018
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A reputation is created over time, based on a set of criteria. Reputation is not only developed by behavior, quality of work, or on keeping promises, but also by a concept—the shadow reputation—referring to the reputation of those we interact with (the people, companies, and machines in your network).

Four Problems with Online Reputation:

•    The platform is centralized, so anyone, whether hackers or administrators, could adjust ratings and reviews at a click of a button;
•     It’s easy to be biased and have your friends give you positive ratings or give your enemies negative ratings, even if you have not used their services;
•     The ratings are non-portable: if you have a five-star rating on eBay and then want to do business on Amazon, you have to start from scratch;
•    The ratings do not correlate with any revenue potential.

Decentralized Reputation using Blockchain:

A solution to the above problems would be to develop a decentralized reputation system, using blockchain or another distributed ledger technology.

•    It is decentralized, which enables a person’s reputation to become immutable, verifiable and traceable, as becomes anything that is recorded on a blockchain.
•    Only users who have used your service or bought a product of you can leave a review. In addition, such a review can only be left once.
•    It can help users carry the reputation as it becomes portable and owned by the individual, organization or thing.
•    The higher your reputation, the higher the quality of the product or service you offer, the more money you could ask for that service.