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Towards Trust and Reputation as a Service in a Blockchain-based Decentralized Marketplace

Stephen Olariu, Ravi Mukkamala, Meshari Aljohani

TL;DR

A novel trust and reputation service for a decentralized marketplace that assumes that a Smart Contract is associated with each transaction and that the Smart Contract is responsible for providing automatic feedback, replacing notoriously unreliable buyer feedback by a more objective assessment of how well the parties have fulfilled their obligations.

Abstract

Motivated by the challenges inherent in implementing trusted services in the Society 5.0 initiative, we propose a novel trust and reputation service for a decentralized marketplace. We assume that a Smart Contract is associated with each transaction and that the Smart Contract is responsible for providing automatic feedback, replacing notoriously unreliable buyer feedback by a more objective assessment of how well the parties have fulfilled their obligations. Our trust and reputation service was inspired by Laplace Law of Succession, where trust in a seller is defined as the probability that she will fulfill her obligations on the next transaction. We offer three applications. First, we discuss an application to a multi-segment marketplace, where a malicious seller may establish a stellar reputation by selling cheap items, only to use their excellent reputation to defraud buyers in a different market segment. Next, we demonstrate how our trust and reputation service works in the context of sellers with time-varying performance by providing two discounting schemes wherein older reputation scores are given less weight than more recent ones. Finally, we show how to predict trust and reputation far in the future, based on incomplete information. Extensive simulations have confirmed our analytical results.

Towards Trust and Reputation as a Service in a Blockchain-based Decentralized Marketplace

TL;DR

A novel trust and reputation service for a decentralized marketplace that assumes that a Smart Contract is associated with each transaction and that the Smart Contract is responsible for providing automatic feedback, replacing notoriously unreliable buyer feedback by a more objective assessment of how well the parties have fulfilled their obligations.

Abstract

Motivated by the challenges inherent in implementing trusted services in the Society 5.0 initiative, we propose a novel trust and reputation service for a decentralized marketplace. We assume that a Smart Contract is associated with each transaction and that the Smart Contract is responsible for providing automatic feedback, replacing notoriously unreliable buyer feedback by a more objective assessment of how well the parties have fulfilled their obligations. Our trust and reputation service was inspired by Laplace Law of Succession, where trust in a seller is defined as the probability that she will fulfill her obligations on the next transaction. We offer three applications. First, we discuss an application to a multi-segment marketplace, where a malicious seller may establish a stellar reputation by selling cheap items, only to use their excellent reputation to defraud buyers in a different market segment. Next, we demonstrate how our trust and reputation service works in the context of sellers with time-varying performance by providing two discounting schemes wherein older reputation scores are given less weight than more recent ones. Finally, we show how to predict trust and reputation far in the future, based on incomplete information. Extensive simulations have confirmed our analytical results.
Paper Structure (28 sections, 10 theorems, 38 equations, 10 figures, 1 table)

This paper contains 28 sections, 10 theorems, 38 equations, 10 figures, 1 table.

Table of Contents

  1. Introduction and motivation
  2. Our contributions
  3. Blockchain-based reputation systems
  4. The assumed blockchain-based decentralized marketplace
  5. The Laplace trust and reputation service
  6. Terminology and definitions
  7. Updating the prior
  8. Modeling the trust measure
  9. Illustrating Theorem \ref{['thm:kn']}
  10. Updating the trust measure
  11. Applications of the Laplace Trust Engine
  12. Price-range specific trust and reputation
  13. Service-specific trust and reputation
  14. Discounting old trust measures
  15. First discounting scheme
  16. ...and 13 more sections

Key Result

Theorem 4.1

Assuming that seller $S$ has accumulated, in the interval $(0,t)$, a reputation score of $(n,k,t)$, the trust measure in $S$ at time $t$ is

Figures (10)

  • Figure 1: Illustrating the trust measure for fixed $n$.
  • Figure 2: Illustrating the trust measure for fixed $k$.
  • Figure 3: Illustrating $\rho_S(0,t)$ for small values of $n$ and $k$
  • Figure 4: A geometric interpretation of Lemma \ref{['better']}.
  • Figure 5: Illustrating the trust measure in a price-based multi-segment market.
  • ...and 5 more figures

Theorems & Definitions (10)

  • Theorem 4.1
  • Theorem 5.1
  • Lemma 5.2
  • Theorem 5.3
  • Lemma 6.1
  • Lemma 6.2
  • Lemma A.1
  • Lemma A.2
  • Lemma A.3
  • Lemma A.4