In a world hurtling through one technological breakthrough after another, Federico Ast looked to the past for inspiration when starting his company, Kleros. Ast went all the way back to ancient Greece, where he saw a citizen-driven justice system built on principles that could be applied to today’s buzziest technology: blockchain.
“In the 5th century BCE, the Greeks had a different concept of justice than we have now,” Ast explained. “They didn’t have lawyers or judges, but they had the idea that ordinary citizens had a right to judge in a trial.”
On trial days, Greeks who wanted to be on the jury would take a bronze plate called a pinakion to court and place it in a big stone block with many slots called a kleroterion. This word inspired the name for Ast’s company: kleros is “chance” and terion roughly translates to “altar.” Therefore, kleroterion is the “altar of chance.”
An official from the justice system would select jurors by throwing white and black balls onto the kleroterion. If the row containing your pinakion had a white ball, you were on the jury. A black ball meant you were dismissed. This system kept the jury selection process fair and transparent, plus it prevented tampering.
Ast has taken this fair and transparent system and applied it to Kleros, a blockchain dispute resolution layer that provides fast, secure and affordable arbitration. Using crowdsourced jurors, Kelros can quickly adjudicate disputes in a secure manner.
Say an entrepreneur in Argentina pays a web developer in Guatemala $1,000 to design a website for him. If the entrepreneur doesn’t like the website the developer built, he’s not going to travel to Guatemala to sue the developer for $1,000.
With Kleros, the entrepreneur would put the money into a smart contract and the money would be transferred once the agreement was satisfied. But if there was a dispute, the money would stay locked in the smart contract and Kleros would select a jury of experts in website disputes. These jurors would analyze the evidence and vote on who is right in the case, then collect a fee for the work they did.
On the surface, Ast seems an unlikely candidate to change the face of governance. His background stretches across many industries–economics, philosophy, media, business administration, product development, and more–but not the legal world.
“The fact that I don’t have a legal background, I see that as more of an advantage than a disadvantage,” Ast admitted. “The people in history who disrupted industries didn’t come from within those industries. It wasn’t two transportation guys who created Uber, it was two software guys. The same goes for the guys who founded Airbnb. As Marc Andreessen famously wrote seven years ago: software is eating the world.”
When examining the legal system, Ast followed Elon Musk’s advice and first considered the principles. At its core, what is a court system? The answer he saw was people trying to find the truth in a given situation, such as whether an agreement was broken. This idea became the backbone of Kleros and it arose from an outsider’s analysis.
“You don’t need to be a lawyer for that,” Ast said.
All startup teams will soon be decentralized
The formation of the Kleros team is a testament to the company’s commitment to decentralization. As Ast’s interest in applying crowdsourcing and blockchain to the justice system grew, a juror at a Hackathon who knew Ast noticed two participants–Clément Lesaege and Nicolas Wagner–who shared similar interests.
She told the duo to contact Ast about collaborating on what would become Kleros. The three men shared similar passions and complementary skills, so they started working together, and today the Kleros team has grown to 10 people spread all over the world.
“It’s a very distributed team because I'm in Buenos Aires, Clément is in Portugal, and Nicholas is in Paris,” Ast shared. “We have a communications manager in Peru and two developers in the U.S.—one in Oregon and one in L.A. There’s a crypto economics researcher in Toronto. We have a PR manager in Germany. Our design lead is in Slovenia and our community manager, who is from Scotland, lives in Serbia.”
With such a spread-out team, Kleros is walking the walk with decentralization. Beyond that, Ast explains that this model works because his team is motivated.
“This is a new model for building companies, but if you go to our GitHub, you can see that it’s working,” he said. “We have a proof of concept and some powerful partnerships with different companies. When you have people motivated and you have your vision of what you want to build, you can make it work. It doesn’t matter where you are.”
Advice for entrepreneurs tackling blockchain
Ast believes that blockchain will open up even more exciting developments in the next five years, such as e-commerce platforms that are completely decentralized. Imagine an eBay without the eBay, a co-operative owned by the users that doesn’t need customer support because it just does one thing and doesn’t require a middleman.
That kind of e-commerce ecosystem is coming, but for now, we’re still in the dark ages.
“We saw this in the 1990s with the internet bubble,” Ast said. “People thought of the internet as a hammer they could use for every nail. You saw companies like Pets.com sell pet food online and have a fleet of trucks everywhere. It was a dumb business model that wasted millions before going bankrupt. There were companies like Amazon and Google that went on to change the world, but a lot companies went broke.”
Ast hears echoes of those days in what’s happening now with blockchain. We know this technology can be used to make payments, but nobody really knows how it works and where it can be used. The endless hype causes people to put money everywhere and drive up valuations. In the end, Ast says, the people who survive will be those looking to solve real-world problems with blockchain and not use it as a means to an end.
